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<SEC-DOCUMENT>0000950124-01-504151.txt : 20020411
<SEC-HEADER>0000950124-01-504151.hdr.sgml : 20020411
ACCESSION NUMBER:		0000950124-01-504151
CONFORMED SUBMISSION TYPE:	S-3
PUBLIC DOCUMENT COUNT:		21
REFERENCES 429:			gov.sec.edgar.dataobjects.object.PDSubFN429Data@d6b36772
FILED AS OF DATE:		20011121

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CONSUMERS ENERGY CO FINANCING VI
		CENTRAL INDEX KEY:			0001141910
		STANDARD INDUSTRIAL CLASSIFICATION:	 []
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-73922-01
		FILM NUMBER:		1798366

	BUSINESS ADDRESS:	
		STREET 1:		FAIRLANE PLAZA SOUTH LEGAL DEPT
		STREET 2:		330 TOWN CENTER
		CITY:			DEARBORN
		STATE:			MI
		ZIP:			48126
		BUSINESS PHONE:		3139829354

	MAIL ADDRESS:	
		STREET 1:		FAIRLANE PLAZA SOUTH LEGAL DEPT
		STREET 2:		330 TOWN CENTER
		CITY:			DEARBORN
		STATE:			MI
		ZIP:			48126

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CONSUMERS ENERGY CO
		CENTRAL INDEX KEY:			0000201533
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC & OTHER SERVICES COMBINED [4931]
		IRS NUMBER:				380442310
		STATE OF INCORPORATION:			MI
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-73922
		FILM NUMBER:		1798365

	BUSINESS ADDRESS:	
		STREET 1:		212 W MICHIGAN AVE
		CITY:			JACKSON
		STATE:			MI
		ZIP:			49201
		BUSINESS PHONE:		5177881030

	MAIL ADDRESS:	
		STREET 1:		212 W MICHIGAN AVE
		STREET 2:		M 946
		CITY:			JACKSON
		STATE:			MI
		ZIP:			49201

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CONSUMERS POWER CO
		DATE OF NAME CHANGE:	19920703

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CONSUMERS ENERGY CO FINANCING V
		CENTRAL INDEX KEY:			0001141894
		STANDARD INDUSTRIAL CLASSIFICATION:	 []
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-73922-02
		FILM NUMBER:		1798367

	BUSINESS ADDRESS:	
		STREET 1:		FAIRLANE PLAZA SOUTH LEGAL DEPT
		STREET 2:		330 TOWN CENTER
		CITY:			DEARBORN
		STATE:			MI
		ZIP:			48126
		BUSINESS PHONE:		3139829354

	MAIL ADDRESS:	
		STREET 1:		FAIRLANE PLAZA SOUTH LEGAL DEPT
		STREET 2:		330 TOWN CENTER
		CITY:			DEARBORN
		STATE:			MI
		ZIP:			48126
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-3
<SEQUENCE>1
<FILENAME>k65350s-3.txt
<DESCRIPTION>FORM S-3
<TEXT>
<PAGE>

   AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 21, 2001

                                                           REGISTRATION NO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               ------------------
                                    FORM S-3
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
                               ------------------

<Table>
<S>                                        <C>                                        <C>
         CONSUMERS ENERGY COMPANY             CONSUMERS ENERGY COMPANY FINANCING V      CONSUMERS ENERGY COMPANY FINANCING VI
(Exact name of registrant as specified in  (Exact name of registrant as specified in  (Exact name of registrant as specified in
                its charter)                              its charter)                               its charter)
                 MICHIGAN                                   DELAWARE                                   DELAWARE
     (State or other jurisdiction of            (State or other jurisdiction of            (State or other jurisdiction of
      incorporation or organization)             incorporation or organization)             incorporation or organization)
                38-2726431                                 52-7194937                                 52-7193813
   (I.R.S. Employer Identification No.)       (I.R.S. Employer Identification No.)       (I.R.S. Employer Identification No.)

         212 WEST MICHIGAN AVENUE                   212 WEST MICHIGAN AVENUE                   212 WEST MICHIGAN AVENUE
         JACKSON, MICHIGAN 49201                    JACKSON, MICHIGAN 49201                    JACKSON, MICHIGAN 49201
              (517) 788-0351                             (517) 788-0351                             (517) 788-0351
    (Address, including zip code, and          (Address, including zip code, and          (Address, including zip code, and
telephone number, including area code, of  telephone number, including area code, of  telephone number, including area code, of
 registrant's principal executive office)   registrant's principal executive office)   registrant's principal executive office)
                                                         ALAN M. WRIGHT
                                                   EXECUTIVE VICE PRESIDENT,
                                                  CHIEF FINANCIAL OFFICER AND
                                                  CHIEF ADMINISTRATIVE OFFICER
                                                    CONSUMERS ENERGY COMPANY
                                                    212 WEST MICHIGAN AVENUE
                                                     JACKSON,MICHIGAN 49201
                                                         (517) 788-0351
              (Name, address, including zip code, and telephone number, including area code, of agent for service)
</Table>

  It is respectfully requested that the Commission send copies of all notices,
                         orders and communications to:

                          MICHAEL D. VAN HEMERT, ESQ.
                           ASSISTANT GENERAL COUNSEL
                             CMS ENERGY CORPORATION
                              FAIRLANE PLAZA SOUTH
                       330 TOWN CENTER DRIVE, SUITE 1100
                            DEARBORN, MICHIGAN 48126
                                 (313) 436-9602
                               ------------------

   APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
                               ------------------

   If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[ ]

   If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]

   If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

   If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

   If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]

                        CALCULATION OF REGISTRATION FEE

<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
     TITLE OF EACH CLASS OF         AMOUNT TO BE   PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AGGREGATE         AMOUNT OF
   SECURITIES TO BE REGISTERED    REGISTERED(1)(2)  PRICE PER UNIT(1)(2)(3)   OFFERING PRICE(1)(2)(3)   REGISTRATION FEE(1)(2)(3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>              <C>                       <C>                        <C>
Senior Notes of Consumers Energy
 Company(4)......................
- ---------------------------------------------------------------------------------------------------------------------------------
Subordinated Debentures of
 Consumers Energy Company(4).....
- ---------------------------------------------------------------------------------------------------------------------------------
Trust Preferred Securities of
 Consumers Energy Company
 Financing V.....................
- ---------------------------------------------------------------------------------------------------------------------------------
Trust Preferred Securities of
 Consumers Energy Company
 Financing VI....................
- ---------------------------------------------------------------------------------------------------------------------------------
Guarantee of Consumers Energy
 Company with respect to Trust
 Preferred Securities of
 Consumers Energy Company
 Financing V and Consumers Energy
 Company Financing VI(5).........
- ---------------------------------------------------------------------------------------------------------------------------------
Total(6).........................   $450,000,000             100%                  $450,000,000                 $112,500
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>

(1) There are being registered hereunder such presently indeterminate principal
    amount of Senior Notes and Subordinated Debentures, as well as shares of
    Trust Preferred Securities of Consumers Energy Company Financing V and
    Consumers Energy Company Financing VI, as may from time to time be issued at
    indeterminate prices.
(2) Estimated solely for the purpose of calculating the registration fee.
    Pursuant to Rule 457(o) under the Securities Act of 1933 which permits the
    registration fee to be calculated on the basis of the maximum offering price
    of all the securities listed, the table does not specify by each class
    information as to the amount to be registered, proposed maximum offering
    price per unit or proposed maximum aggregate offering price.
(3) Exclusive of accrued interest and distributions, if any.
(4) The Senior Notes or Subordinated Debentures may be purchased by, and
    constitute assets of, Consumers Energy Company Financing V or Consumers
    Energy Company Financing VI, and may later be distributed under certain
    circumstances to holders of Trust Preferred Securities.
(5) The Registration Statement is deemed to include the obligations of Consumers
    Energy Company under the guarantee and certain backup undertakings under:
    (1) the subordinated debt indenture pursuant to which the subordinated
    debentures will be issued or the senior debt indenture pursuant to which the
    senior notes will be issued; (2) the subordinated debentures or the senior
    notes; and (3) the declaration of trust of Consumers Energy Company
    Financing V and Consumers Energy Company Financing VI, including Consumers
    Energy Company's obligations under such subordinated debt indenture or
    senior debt indenture to pay costs, expenses, debts and liabilities of the
    trust (other than with respect to the trust preferred securities and the
    common securities of Consumers Energy Company Financing V or Consumers
    Energy Company Financing VI), which taken together provide a full and
    unconditional guarantee of amounts due on the trust preferred securities. No
    separate consideration will be received for the guarantee and such backup
    undertakings. The guarantee is not traded separately.
(6) Pursuant to Rule 429 of the Securities, as amended, the prospectus contained
    herein also relates to the Senior Notes, Subordinated Debentures, Guarantees
    and Trust Preferred Securities of Consumers Energy Company V and VI,
    Guarantees, Stock Purchase contracts and Stock Purchase Units of the
    registrant previously registered under in the Registration statement on Form
    S-3 (File Number 333-62500) of which $50,000,000 is being carried forward.
    The filing fee associated with the securities and previously paid with the
    earlier registration statement is $12,500.

    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO
SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER TO SALE IS NOT PERMITTED.

                            CONSUMERS ENERGY COMPANY

                                  SENIOR NOTES
                            SUBORDINATED DEBENTURES
                                   GUARANTEES

                                      AND

                      CONSUMERS ENERGY COMPANY FINANCING V
                     CONSUMERS ENERGY COMPANY FINANCING VI
                           TRUST PREFERRED SECURITIES
                  GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
                            CONSUMERS ENERGY COMPANY

                          OFFERING PRICE: $500,000,000
                            ------------------------

     We may offer, from time to time:

     - secured senior debt, unsecured senior debt or unsecured subordinated debt
       securities consisting of debentures, notes and other unsecured evidence
       of indebtedness; and

     - guarantees of Consumers Energy Company with respect to trust preferred
       securities of Consumers Energy Company Financing V and Consumers Energy
       Company Financing VI.

     For each type of securities listed above, the amount, price and terms will
be determined at or prior to the time of sale.

     Consumers Energy Company Financing V and Consumers Energy Company Financing
VI, which are Delaware business trusts, may offer trust preferred securities.
The trust preferred securities represent preferred undivided beneficial
interests in the assets of Consumers Energy Company Financing V and Consumers
Energy Company Financing VI in amounts, at prices and on terms to be determined
at or prior to the time of sale.

     We will provide the specific terms of these securities in an accompanying
prospectus supplement or supplements. You should read this prospectus and the
accompanying prospectus supplement or supplements carefully before you invest.

     Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.

     We intend to sell these securities through underwriters, dealers, agents or
directly to a limited number of purchasers. The names of, and any securities to
be purchased by or through, these parties, the compensation of these parties and
other special terms in connection with the offering and sale of these securities
will be provided in the related prospectus supplement or supplements.

     This prospectus may not be used to consummate sales of any of these
securities unless accompanied by a prospectus supplement.
<PAGE>

     You should rely only on the information contained or incorporated by
reference in this prospectus. We have not, and the underwriters have not,
authorized any person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. We are not, and the underwriters are not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. You
should assume that the information appearing in this prospectus is accurate as
of the date on the front cover of this prospectus. Consumers' business,
financial condition, results of operations and prospects may have changed since
such dates.

                      WHERE YOU CAN FIND MORE INFORMATION

     Consumers files reports, proxy statements and other information with the
Securities and Exchange Commission. Our SEC filings are also available over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document it files at the SEC's public reference room at 450 Fifth Street
N.W., Room 1024, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330
for more information on the public reference rooms and their copy charges. You
may also inspect our SEC reports and other information at the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.

     Consumers is "incorporating by reference" information into this prospectus.
This means that Consumers is disclosing important information by referring to
another document filed separately with the SEC. The information incorporated by
reference is deemed to be part of this prospectus, except for any information
superceded by information in this prospectus. This prospectus incorporates by
reference the documents set forth that Consumers has previously filed with the
SEC. These documents contain important information about Consumers and its
finances.

<Table>
<Caption>
      SEC FILINGS (FILE NO. 1-5611)                                    PERIOD/DATE
- ------------------------------------------                             -----------
<S>                                           <C>
- - Annual Report on Form 10-K..............    Year ended December 31, 2000
- - Quarterly Reports of Form 10-Q..........    Quarters ended March 31, 2001, June 30, 2001, and September
                                              30, 2001
- - Current Reports on Form 8-K.............    Filed February 23, 2001, June 22, 2001, July 12, 2001,
                                              August 1, 2001, August 31, 2001, and October 26, 2001
</Table>

     The documents filed by Consumers with the SEC pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
prospectus, but prior to its termination, are also incorporated by reference
into this prospectus.

     Consumers will provide, upon your oral or written request, a copy of any or
all of the information that has been incorporated by reference in the prospectus
but not delivered with the prospectus. You may request a copy of these filings
at no cost, by writing or telephoning Consumers at the following address:

    Consumers Energy Company
    212 West Michigan Avenue
    Jackson, Michigan 49201
    Tel: (517) 788-0550
    Attention: Office of the Secretary

     You should rely only on the information contained or incorporated by
reference in this prospectus. Consumers has not authorized anyone to provide you
with information that is different from this information.

     Separate financial statements of the trusts have not been included in this
prospectus. Consumers and the trusts do not consider such financial statements
to be helpful because:

     - Consumers beneficially owns directly or indirectly all of the undivided
       beneficial interests in the assets of the trusts (other than the
       beneficial interests represented by the trust preferred securities).

                                        2
<PAGE>

       See "Consumers Energy Company Trusts," "Description of
       Securities -- Trust Preferred Securities" and "Description of
       Securities -- The Guarantees."

     - Consumers will guarantee the trust preferred securities such that the
       holders of the trust preferred securities, with respect to the payment of
       distributions and amounts upon liquidation, dissolution and winding-up,
       are at least in the same position with regard to the assets of Consumers
       as a preferred stockholder of Consumers.

     - in future filings under the Securities Exchange Act of 1934, an audited
       footnote to Consumers' annual financial statements will state that the
       trusts are wholly-owned by Consumers, that the sole assets of the trusts
       are the senior notes or the subordinated debentures of Consumers having a
       specified total principal amount, and, considered together, the back-up
       undertakings, including the guarantees, constitute a full and
       unconditional guarantee by Consumers of the trusts' obligations under the
       trust preferred securities issued by the trusts.

     - each trust is a newly created special purpose entity, has no operating
       history, no independent operations and is not engaged in, and does not
       propose to engage in, any activity other than as described under
       "Consumers Energy Company Trusts."

                            CONSUMERS ENERGY COMPANY

     Consumers, formed in Michigan in 1968, is the successor to a corporation
organized in Maine in 1910 that conducted business in Michigan from 1915 to
1968.

     Consumers is a public utility that provides natural gas and/or electricity
to almost six million of the approximately 9.9 million residents in Michigan's
lower peninsula. Consumers' electric operations include the generation,
purchase, transmission, distribution, and sale of electricity. Consumers
provides electric services in 61 of the 68 counties of Michigan's lower
peninsula. In 2000, Consumers' electric utility owned and operated 31 electric
generating plants with an aggregate of 6,437 MW of capacity and served 1.69
million customers in Michigan's lower peninsula. Consumers' gas utility
operations purchase, transport, store, distribute and sell natural gas. As of
December 31, 2000, it was authorized to provide service in 54 of the 68 counties
in Michigan's lower peninsula. Consumers' gas utility owned and operated over
24,383 miles of distribution mains and 1,108 miles of transmission lines
throughout Michigan's lower peninsula, providing natural gas to 1.6 million
customers. In 2000, Consumers' consolidated operating revenue was $3.935
billion. Of Consumers' operating revenue, 68% was generated from its electric
utility business, 30% from its gas utility business, and 2% from its non-utility
business.

     Consumers is subject to regulation by various federal, state, local and
foreign governmental agencies. Consumers is subject to the jurisdiction of the
Michigan Public Service Commission, which regulates public utilities in Michigan
with respect to retail utility rates, accounting, utility services, certain
facilities and various other matters. The Federal Energy Regulatory Commission
("FERC") also has jurisdiction under the Natural Gas Act over Michigan Gas
Storage Company, a subsidiary of Consumers, relating, among other things, to the
construction of facilities and to service provided and rates charged by Michigan
Gas Storage. Some of Consumers' gas business is also subject to regulation of
FERC, including a blanket transportation tariff pursuant to which Consumers can
transport gas in interstate commerce. Certain of Consumers' electric operations
are also subject to regulation by FERC, including compliance with FERC's
accounting rules and other regulations applicable to "public utilities" and
"licensees," the transmission of electric energy in interstate commerce and the
rates and charges for the sale of electric energy at wholesale and transmission
of electric energy in interstate commerce, the consummation of certain mergers,
the sale of certain facilities, the construction, operation and maintenance of
hydroelectric projects and the issuance of securities, as provided by the
Federal Power Act. Consumers is subject to the jurisdiction of the Nuclear
Regulatory Commission ("NRC") with respect to the design, construction and
operation of its Palisades nuclear power plant and the decommissioning of its
closed Big Rock power plant. Consumers is also subject to NRC jurisdiction with
respect to certain other uses of nuclear material.

                                        3
<PAGE>

     The foregoing information concerning Consumers does not purport to be
comprehensive. For additional information concerning Consumers' business and
affairs, including their capital requirements and external financing plans,
pending legal and regulatory proceedings and descriptions of certain laws and
regulations to which those companies are subject, prospective purchasers should
refer to the Incorporated Documents. See "Where You Can Find More Information"
above.

     The address of the principal executive offices of Consumers Energy Company
is 212 West Michigan Avenue, Jackson, Michigan 49201. Its telephone number is
(517) 788-0550.

                        CONSUMERS ENERGY COMPANY TRUSTS

     Consumers Energy Company Financing V and Consumers Energy Company Financing
VI are statutory business trusts created under the Delaware Business Trust Act
by way of:

     - Declaration of Trust executed by Consumers, as sponsor, and the trustees
       of the trusts and

     - the filing of certificates of trust with the Secretary of State of the
       State of Delaware.

     At the time of public issuance of the trust preferred securities, each
Declaration of Trust will be amended and restated in its entirety and will be
qualified as an indenture under the Trust Indenture Act of 1939, as amended.
Consumers will directly or indirectly acquire common securities of each trust in
a total liquidation amount of at least 3% of the total capital of the trust.
Each trust exists for the exclusive purposes of:

     - issuing the trust preferred securities and common securities representing
       undivided beneficial interests in the assets of the trust;

     - investing the gross proceeds of the common securities and the trust
       preferred securities in the senior notes or subordinated debentures; and

     - engaging in only those other activities necessary or incidental thereto.

     Each trust has a term of approximately 55 years, but may terminate earlier
as provided in the amended and restated Declaration of Trust.

     The proceeds from the offering of the trust preferred securities and the
sale of the common securities may be used by each trust to purchase from
Consumers senior notes or subordinated debentures in a total principal amount
equal to the total liquidation preference of the common securities and the trust
preferred securities. The Consumers notes or debentures would bear interest at
an annual rate equal to the annual distribution rate of the common securities
and the trust preferred securities and would have certain redemption terms that
correspond to the redemption terms for the common securities and the trust
preferred securities. The senior notes will rank on an equal basis with all
other unsecured debt of Consumers except subordinated debt. The subordinated
debentures will rank subordinate in right of payment to all of Consumers' senior
indebtedness (as defined in this prospectus). Distributions on the common
securities and the trust preferred securities may not be made unless each trust
receives corresponding interest payments on the senior notes or the subordinated
debentures from Consumers. Consumers will irrevocably guarantee, on a senior or
subordinated basis, as applicable, and to the extent set forth in the guarantee,
with respect to each of the common securities and the trust preferred
securities, the payment of distributions, the redemption price, including all
accrued or deferred and unpaid distributions, and payment on liquidation, but
only to the extent of funds on hand. Each guarantee will be unsecured and will
be either equal to or subordinate to, as applicable, all senior indebtedness, of
Consumers. Upon the occurrence of certain events (subject to the conditions to
be described in an accompanying prospectus supplement) each trust may be
liquidated and the holders of the common securities and the trust preferred
securities could receive senior notes or subordinated debentures in lieu of any
liquidating cash distribution.

     Pursuant to the amended and restated Declaration of Trust, the number of
trustees of each trust will initially be four. Two of the trustees will be
persons who are employees or officers of or who are affiliated
                                        4
<PAGE>

with Consumers and will be referred to as the regular trustees. The third
trustee will be a financial institution that is unaffiliated with Consumers,
which trustee will serve as property trustee under the applicable amended and
restated Declaration of Trust and as indenture trustee for the purposes of
compliance with the provisions of the Trust Indenture Act of 1939. Initially,
The Bank of New York, a New York banking corporation, will be the property
trustee until removed or replaced by the holder of the common securities. For
the purpose of compliance with the provisions of the Trust Indenture Act of
1939, The Bank of New York will also act as guarantee trustee. The fourth
trustee, The Bank of New York (Delaware), will act as the Delaware trustee for
the purposes of the Delaware Business Trust Act, until removed or replaced by
the holder of the common securities. See "Description of Securities -- The
Guarantees."

     The property trustee will hold title to the applicable senior notes or
subordinated debenture for the benefit of the holders of the common securities
and the trust preferred securities and the property trustee will have the power
to exercise all rights, powers and privileges under the applicable indentures as
the holder of the senior notes or subordinated debenture. In addition, the
property trustee will maintain exclusive control of a segregated non-interest
bearing bank account to hold all payments made in respect of the senior notes or
subordinated debentures for the benefit of the holders of the common securities
and the trust preferred securities. The property trustee will make payments of
distributions and payments on liquidation, redemption and otherwise to the
holders of the common securities and the trust preferred securities out of funds
from the segregated non-interest bearing bank account. The guarantee trustee
will hold the guarantees for the benefit of the holders of the common securities
and the trust preferred securities. Consumers, as the direct or indirect holder
of all the common securities, will have the right to appoint, remove or replace
any of the trustees. Consumers will also have the right to increase or decrease
the number of trustees, as long as the number of trustees shall be at least
three, a majority of which shall be regular trustees. Consumers will pay all
fees and expenses related to the trusts and the offering of the common
securities and the trust preferred securities.

     The rights of the holders of the trust preferred securities, including
economic rights, rights to information and voting rights, are set forth in the
applicable amended and restated Declaration of Trust, the Delaware Business
Trust Act and the Trust Indenture Act of 1939.

     The trustee for each trust in the State of Delaware is The Bank of New York
(Delaware), White Clay Center, Route 273, Newark, Delaware 19711.

     The principal place of business of each trust will be c/o Consumers Energy
Company, 212 West Michigan Avenue, Jackson, Michigan 49201.

                                USE OF PROCEEDS

     The proceeds received by each of the trusts from the sale of its trust
preferred securities or the common securities will be invested in the senior
notes or the subordinated debentures. As will be more specifically set forth in
the applicable prospectus supplement, Consumers will use those borrowed amounts
and the net proceeds from the sale of senior notes or subordinated debentures
offered hereby for its general corporate purposes, including capital
expenditures, investment in subsidiaries, working capital and repayment of debt.
Any specific allocation of the proceeds to a particular purpose that has been
made at the date of any prospectus supplement will be described in the
appropriate prospectus supplement.

                                        5
<PAGE>

                     RATIO OF EARNINGS TO FIXED CHARGES AND
        RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

     The ratios of earnings to fixed charges and the ratios of earnings to fixed
charges and preferred stock dividends for each of the years ended December 31,
1996 through 2000 and the nine months ended September 30, 2001 and 2000, are as
follows:

<Table>
<Caption>
                                                NINE MONTHS
                                                   ENDED
                                               SEPTEMBER 30,         YEAR ENDED DECEMBER 31
                                               -------------   ----------------------------------
                                               2001    2000    2000   1999   1998     1997   1996
                                               -----   -----   ----   ----   ----     ----   ----
<S>                                            <C>     <C>     <C>    <C>    <C>      <C>    <C>
Ratio of earnings to:(a)
Fixed charges................................  1.65    2.89    3.06   3.46   3.16(b)  3.31   3.27
Fixed charges & preferred stock dividends....  1.37    2.41    2.57   2.99   2.52(c)  2.61   2.54
</Table>

- ---------------

(a)  For purposes of computing the ratio, earnings represent net income before
     income taxes, net interest charges and the estimated interest portions of
     lease rentals, plus distributed income of equity investees less earnings
     from minority interests of equity investees. Earnings for the ratio of
     earnings to fixed charges and preferred stock dividends also includes the
     amount required to pay distributions on preferred securities and the amount
     of pretax earnings required to pay the dividends on outstanding preferred
     stock.

(b)  Excludes a cumulative effect of change in accounting after-tax gain of $43
     million; if included, ratio would be 3.52.

(c)  Excludes a cumulative effect of change in accounting after-tax gain of $43
     million: if included, ratio would be 2.81.

                                        6
<PAGE>

                           DESCRIPTION OF SECURITIES

INTRODUCTION

     Specific terms of the debt securities consisting of the senior notes and
subordinated debentures, or the trust preferred securities, or any combination
of these securities, the irrevocable guarantees of Consumers, with respect to
each of the common securities and the preferred securities of the trust, for
which this prospectus is being delivered, will be set forth in an accompanying
prospectus supplement or supplements. The prospectus supplement will set forth
with regard to the particular offered securities, without limitation, the
following:

     - in the case of debt securities, the designation, total principal amount,
       denomination, maturity, premium, if any, any exchange, conversion,
       redemption or sinking fund provisions, interest rate (which may be fixed
       or variable), the time or method of calculating interest payments, the
       right of Consumers, if any, to defer payment or interest on the debt
       securities and the maximum length of such deferral, put options, if any,
       public offering price, ranking, any listing on a securities exchange and
       other specific terms of the offering; and

     - in the case of trust preferred securities, the designation, number of
       shares, liquidation preference per security, initial public offering
       price, any listing on a securities exchange, dividend rate (or method of
       calculation thereof), dates on which dividends shall be payable and dates
       from which dividends shall accrue, any voting rights, any redemption,
       exchange, conversion or sinking fund provisions and any other rights,
       preferences, privileges, limitations or restrictions relating to a
       specific series of the trust preferred securities including a description
       of the Consumers guarantee, as the case may be.

DEBT SECURITIES

     Senior notes will be issued under a senior debt indenture. The subordinated
debentures will be issued under a subordinated debt indenture. The senior debt
indenture and the subordinated debt indenture are sometimes referred to in this
prospectus individually as an "indenture" and collectively as the "indentures."

     The following briefly summarizes the material provisions of the indentures
and the debt securities. You should read the more detailed provisions of the
applicable indenture, including the defined terms, for provisions that may be
important to you. You should also read the particular terms of a series of debt
securities, which will be described in more detail in the applicable prospectus
supplement. Copies of the indentures may be obtained from Consumers or the
applicable trustee.

     Unless otherwise provided in the applicable prospectus supplement, the
trustee under the senior debt indenture will be The Chase Manhattan Bank and the
trustee under the subordinated debt indenture will be The Bank of New York.

General

     The indentures provide that debt securities of Consumers may be issued in
one or more series, with different terms, in each case as authorized on one or
more occasions by Consumers.

     Federal income tax consequences and other special considerations applicable
to any debt securities issued by Consumers at a discount will be described in
the applicable prospectus supplement.

     The applicable prospectus supplement relating to any series of debt
securities will describe the following terms, where applicable:

     - the title of the debt securities;

     - whether the debt securities will be senior or subordinated debt;

     - the total principal amount of the debt securities;
                                        7
<PAGE>

     - the percentage of the principal amount at which the debt securities will
       be sold and, if applicable, the method of determining the price;

     - the maturity date or dates;

     - the interest rate or the method of computing the interest rate;

     - the date or dates from which any interest will accrue, or how such date
       or dates will be determined, and the interest payment date or dates and
       any related record dates;

     - the location where payments on the debt securities will be made;

     - the terms and conditions on which the debt securities may be redeemed at
       the option of Consumers;

     - any obligation of Consumers to redeem, purchase or repay the debt
       securities at the option of a holder upon the happening of any event and
       the terms and conditions of redemption, purchase or repayment;

     - any provisions for the discharge of Consumers' obligations relating to
       the debt securities by deposit of funds or United States government
       obligations;

     - whether the debt securities are to trade in book-entry form and the terms
       and any conditions for exchanging the global security in whole or in part
       for paper certificates;

     - any material provisions of the applicable indenture described in this
       prospectus that do not apply to the debt securities;

     - any additional amounts with respect to the debt securities that Consumers
       will pay to a non-United States person because of any tax, assessment or
       governmental charge withheld or deducted and, if so, any option of
       Consumers to redeem the debt securities rather than paying these
       additional amounts;

     - any additional events of default; and

     - any other specific terms of the debt securities.

Concerning the Trustees

     Each of The Chase Manhattan Bank, the trustee under the senior debt
indenture for the senior notes, and The Bank of New York, the trustee under the
subordinated debt indenture for the subordinated debentures, is one of a number
of banks with which Consumers and its subsidiaries maintain ordinary banking
relationships, including credit facilities.

Exchange and Transfer

     Debt securities may be presented for exchange. Registered debt securities
may be presented for registration of transfer at the offices and, subject to the
restrictions set forth in the debt security and in the applicable prospectus
supplement, without service charge, but upon payment of any taxes or other
governmental charges due in connection with the transfer, subject to any
limitations contained in the applicable indenture. Debt securities in bearer
form and any related coupons, will be transferable by delivery.

Payment

     Distributions on the debt securities in registered form will be made at the
office or agency of the applicable trustee in the Borough of Manhattan, the City
of New York or its other designated office. However, at the option of Consumers,
payment of any interest may be made by check or by wire transfer. Payment of any
interest due on debt securities in registered form will be made to the persons
in whose

                                        8
<PAGE>

name the debt securities are registered at the close of business on the record
date for such interest payments. Payments made in any other manner will be
specified in the prospectus supplement.

Governing Law

     Each indenture and the debt securities will be governed by, and construed
in accordance with, the laws of the State of Michigan unless the laws of another
jurisdiction shall mandatorily apply. The rights, duties and obligations of the
subordinated note trustee are governed by and construed in accordance with the
laws of the State of New York.

SENIOR NOTES

General

     The following summaries of some important provisions of the senior note
indenture (including its supplements by such reference) do not purport to be
complete and are subject to, and qualified in their entirety by, all of the
provisions of the senior note indenture. The senior note indenture is
incorporated by reference in this prospectus and is available upon request to
the senior note trustee. In addition, capitalized terms used in this section and
not otherwise defined in this prospectus shall have the meaning given to them in
the senior note indenture.

Security; Release Date

     Until the release date (as described in the next paragraph), the senior
notes will be secured by one or more series of Consumers' first mortgage bonds
issued and delivered by Consumers to the senior note trustee. See "Description
of First Mortgage Bonds." Upon the issuance of a series of senior notes prior to
the release date, Consumers will simultaneously issue and deliver to the senior
note trustee, as security for all senior notes, a series of first mortgage bonds
that will have the same stated maturity date and corresponding redemption
provisions, and will be in the same total principal amount as the series of the
senior notes being issued. Any series of first mortgage bonds securing senior
notes may, but need not, bear interest. Any payment by Consumers to the senior
note trustee of principal of, interest and/or premium, if any, on a series of
first mortgage bonds will be applied by the senior note trustee to satisfy
Consumers' obligations with respect to principal of, interest and/or premium, if
any, on the corresponding senior notes.

     The "release date" will be the date that all first mortgage bonds of
Consumers issued and outstanding under a mortgage indenture with The Chase
Manhattan Bank as mortgage trustee, other than first mortgage bonds securing
senior notes, have been retired (at, before or after their maturity) through
payment, redemption or otherwise. On the release date, the senior note trustee
will deliver to Consumers, for cancellation, all first mortgage bonds securing
senior notes. Not later than 30 days thereafter, the senior note trustee will
provide notice to all holders of senior notes of the occurrence of the release
date. As a result, on the release date, the first mortgage bonds securing senior
notes will cease to secure the senior notes. The senior notes will then become
unsecured general obligations of Consumers and will rank equally with other
unsecured indebtedness of Consumers. Each series of first mortgage bonds that
secures senior notes will be secured by a lien on certain property owned by
Consumers. See "Description of First Mortgage Bonds -- Priority and Security."
Upon the payment or cancellation of any outstanding senior notes, the senior
note trustee will surrender to Consumers for cancellation an equal principal
amount of the related series of first mortgage bonds. Consumers will not permit,
at any time prior to the release date, the total principal amount of first
mortgage bonds securing senior notes held by the senior note trustee to be less
than the total principal amount of senior notes outstanding. Following the
release date, Consumers will cause the mortgage to be discharged and will not
issue any additional first mortgage bonds under the mortgage. While Consumers
will be precluded after the release date from issuing additional first mortgage
bonds, it will not be precluded under the senior note indenture or senior notes
from issuing or assuming other secured debt, or incurring liens on its property,
except to the extent indicated below under "-- Certain Covenants of
Consumers -- Limitation on Liens."

                                        9
<PAGE>

Events Of Default

     The following constitute events of default under senior notes of any
series:

          (1) failure to pay principal of and premium, if any, on any senior
     note of such series when due;

          (2) failure to pay interest on any senior note of such series when due
     for 60 days;

          (3) failure to perform any other covenant or agreement of Consumers in
     the senior notes of such series for 90 days after written notice to
     Consumers by the senior note trustee or the holders of at least 33% in
     total principal amount of the outstanding senior notes;

          (4) prior to the release date, a default under the mortgage; provided,
     however, that the waiver or cure of such default and the rescission and
     annulment of the consequences under the mortgage will be a waiver of the
     corresponding event of default under the senior note indenture and a
     rescission and annulment of the consequences under the senior note
     indenture; and

          (5) certain events of bankruptcy, insolvency, reorganization,
     assignment or receivership of Consumers.

     If an event of default occurs and is continuing, either the senior note
trustee or the holders of a majority in total principal amount of the
outstanding senior notes may declare the principal amount of all senior notes to
be due and payable immediately.

     The senior note trustee generally will be under no obligation to exercise
any of its rights or powers under the senior note indenture at the request or
direction of any of the holders of senior notes of such series unless those
holders have offered to the senior note trustee reasonable security or
indemnity. Subject to the provisions for indemnity and certain other limitations
contained in the senior note indenture, the holders of a majority in principal
amount of the outstanding senior notes of such series generally will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the senior note trustee, or of exercising any trust or power
conferred on the senior note trustee. The holders of a majority in principal
amount of the outstanding senior notes of such series generally will have the
right to waive any past default or event of default (other than a payment
default) on behalf of all holders of senior notes of such series.

     No holder of senior notes of a series may institute any action against
Consumers under the senior note indenture unless:

          (1) that holder gives to the senior note trustee advance written
     notice of default and its continuance;

          (2) the holders of not less than a majority in total principal amount
     of senior notes of such series then outstanding affected by that event of
     default request the senior note trustee to institute such action;

          (3) that holder has offered the senior note trustee reasonable
     indemnity; and

          (4) the senior note trustee shall not have instituted such action
     within 60 days of such request.

     Furthermore, no holder of senior notes will be entitled to institute any
such action if and to the extent that that action would disturb or prejudice the
rights of other holders of senior notes of such series.

     Within 90 days after the occurrence of a default with respect to the senior
notes of a series, the senior note trustee must give the holders of the senior
notes of such series notice of any such default known to the senior note
trustee, unless cured or waived. The senior note trustee may withhold such
notice if it determines in good faith that it is in the interest of such holders
to do so except in the case of default in the payment of principal of, and
interest and/or premium, if any, on any senior notes of such series. Consumers
is required to deliver to the senior note trustee each year a certificate as to
whether or not, to the knowledge of the officers signing such certificate,
Consumers is in compliance with the conditions and covenants under the senior
note indenture.

                                        10
<PAGE>

Modification

     Consumers and the senior note trustee cannot modify and amend the senior
note indenture without the consent of the holders of a majority in principal
amount of the outstanding affected senior notes. Consumers and the senior note
trustee cannot modify and amend the senior note indenture without the consent of
the holder of each outstanding senior note of such series to:

          (1) change the maturity date of any senior note of such series;

          (2) reduce the rate (or change the method of calculation thereof) or
     extend the time of payment of interest on any senior note of such series;

          (3) reduce the principal amount of, or premium payable on, any senior
     note of such series;

          (4) change the coin or currency of any payment of principal of, and
     interest and/or premium on any senior note of such series;

          (5) change the date on which any senior note of such series may be
     redeemed or repaid at the option of its holder or adversely affect the
     rights of a holder to institute suit for the enforcement of any payment on
     or with respect to any senior note of such series;

          (6) impair the interest of the senior note trustee in the first
     mortgage bonds securing the senior notes of such series held by it or,
     prior to the release date, reduce the principal amount of any series of
     first mortgage bond securing the senior notes of such series to an amount
     less than the principal amount of the related series of senior notes or
     alter the payment provisions of such senior note mortgage bonds in a manner
     adverse to the holders of the senior notes; or

          (7) modify the senior notes of such series necessary to modify or
     amend the senior note indenture or to waive any past default to less than a
     majority.

     Consumers and the senior note trustee can modify and amend the senior note
indenture without the consent of the holders in certain cases, including:

          (1) to add to the covenants of Consumers for the benefit of the
     holders or to surrender a right conferred on Consumers in the senior note
     indenture;

          (2) to add further security for the senior notes of such series;

          (3) to add provisions enabling Consumers to be released with respect
     to one or more series of outstanding senior notes from its obligations
     under the covenants upon satisfaction of conditions with respect to such
     series of senior notes;

          (4) to supply omissions, cure ambiguities or correct defects which
     actions, in each case, are not prejudicial to the interests of the holders
     in any material respect; or

          (5) to make any other change that is not prejudicial to the holders of
     senior notes of such series in any material respect.

     A supplemental indenture which changes or eliminates any covenant or other
provision of the senior note indenture (or any supplemental indenture) which has
expressly been included solely for the benefit of one or more series of senior
notes, or which modifies the rights of the holders of senior notes of such
series with respect to such covenant or provision, will be deemed not to affect
the rights under the senior note indenture of the holders of senior notes of any
other series.

Defeasance and Discharge

     The senior note indenture provides that Consumers will be discharged from
any and all obligations in respect to the senior notes of such series and the
senior note indenture (except for certain obligations such as obligations to
register the transfer or exchange of senior notes, replace stolen, lost or
mutilated senior notes and maintain paying agencies) if, among other things,
Consumers irrevocably deposits with the senior note trustee, in trust for the
benefit of holders of senior notes of such series, money or certain
                                        11
<PAGE>

United States government obligations, or any combination of money or government
obligations. The payment of interest and principal on the deposits in accordance
with their terms must provide money in an amount sufficient, without
reinvestment, to make all payments of principal of, and any premium and interest
on, the senior notes on the dates such payments are due in accordance with the
terms of the senior note indenture and the senior notes of such series. If all
of the senior notes of such series are not due within 90 days of such deposit by
redemption or otherwise, Consumers must also deliver to the senior note trustee
an opinion of counsel to the effect that the holders of the senior notes of such
series will not recognize income, gain or loss for federal income tax purposes
as a result of that defeasance or discharge of the senior note indenture.
Thereafter, the holders of senior notes must look only to the deposit for
payment of the principal of, and interest and any premium on, the senior notes.

Consolidation, Merger and Sale or Disposition of Assets

     Consumers may consolidate with or merge into, or sell or otherwise dispose
of its properties as or substantially as an entirety if:

          (1) the new corporation is a corporation organized and existing under
     the laws of the United States of America, any state thereof, or the
     District of Columbia,

          (2) the new corporation assumes the due and punctual payment of the
     principal of and premium and interest on all the senior notes and the
     performance of every covenant of the senior note indenture to be performed
     or observed by Consumers, and

          (3) if prior to the release date, the new corporation assumes
     Consumers' obligations under the mortgage indenture with respect to first
     mortgage bonds securing senior notes.

     The conveyance or other transfer by Consumers of:

          (1) all or any portion of its facilities for the generation of
     electric energy,

          (2) all of its facilities for the transmission of electric energy, or

          (3) all of its facilities for the distribution of natural gas, in each
     case considered alone or in any combination with properties described in
     (1), (2) or (3) of this sentence, will not be considered a conveyance or
     other transfer of all the properties of Consumers, as or substantially as
     an entirety.

Certain Covenants Of Consumers

     Limitation on Liens

     So long as any senior notes are outstanding, Consumers may not issue,
assume, guarantee or permit to exist after the release date any debt that is
secured by any mortgage, security interest, pledge or lien (each a "lien") of or
upon any operating property of Consumers, whether owned at the date of the
senior note indenture or thereafter acquired, without in any such case
effectively securing the senior notes (together with, if Consumers shall so
determine, any other indebtedness of Consumers ranking equally with the senior
notes) equally and ratably with such debt (but only so long as such debt is so
secured). The foregoing restriction will not apply to:

          (1) liens on any operating property existing at the time of its
     acquisition (which liens may also extend to subsequent repairs, alterations
     and improvements to such operating property);

          (2) liens on operating property of a corporation existing at the time
     such corporation is merged into or consolidated with, or such corporation
     disposes of its properties (or those of a division) as or substantially as
     an entirety to, Consumers;

          (3) liens on operating property to secure the cost of acquisition,
     construction, development or substantial repair, alteration or improvement
     of property or to secure indebtedness incurred to provide funds for any
     such purpose or for reimbursement of funds previously expended for any such
     purpose, provided such liens are created or assumed contemporaneously with,
     or within 18 months after, such

                                        12
<PAGE>

     acquisition or the completion of substantial repair or alteration,
     construction, development or substantial improvement;

          (4) liens in favor of any state or any department, agency or
     instrumentality or political subdivision of any state, or for the benefit
     of holders of securities issued by any such entity (or providers of credit
     enhancement with respect to such securities), to secure any debt
     (including, without limitation, obligations of Consumers with respect to
     industrial development, pollution control or similar revenue bonds)
     incurred for the purpose of financing all or any part of the purchase price
     or the cost of substantially repairing or altering, constructing,
     developing or substantially improving operating property of Consumers; or

          (5) any extension, renewal or replacement (or successive extensions,
     renewals or replacements), in whole or in part, of any lien referred to in
     clauses (1) through (4), provided, however, that the principal amount of
     debt secured thereby and not otherwise authorized by said clauses (1) to
     (4), inclusive, shall not exceed the principal amount of debt, plus any
     premium or fee payable in connection with any such extension, renewal or
     replacement, so secured at the time of such extension, renewal or
     replacement.

     These restrictions will not apply to the issuance, assumption or guarantee
by Consumers of debt secured by a lien which would otherwise be subject to the
foregoing restrictions up to a total amount which, together with all other
secured debt of Consumers (not including secured debt permitted under any of the
foregoing exceptions) and the value of sale and lease-back transactions existing
at such time (other than sale and lease-back transactions the proceeds of which
have been applied to the retirement of certain indebtedness, sale and lease-back
transactions in which the property involved would have been permitted to be
subjected to a lien under any of the foregoing exceptions in clauses (1) to (5)
and sale and lease-back transactions that are permitted by the first sentence of
"Limitation on Sale and Lease-Back Transactions" below), does not exceed the
greater of 15% of Net Tangible Assets or 15% of Capitalization.

     Limitation on Sale and Lease-Back Transactions

     So long as senior notes are outstanding, Consumers may not enter into or
permit to exist after the release date any sale and lease-back transaction with
respect to any operating property (except for transactions involving leases for
a term, including renewals, of not more than 48 months), if the purchaser's
commitment is obtained more than 18 months after the later of the completion of
the acquisition, construction or development of such operating property or the
placing in operation of such operating property or of such operating property as
constructed or developed or substantially repaired, altered or improved. This
restriction will not apply if:

          (1) Consumers would be entitled under any of the provisions described
     in clauses (1) to (5) of the first sentence of the second paragraph under
     "Limitation on Liens" above to issue, assume, guarantee or permit to exist
     debt secured by a lien on such operating property without equally and
     ratably securing the senior notes,

          (2) after giving effect to such sale and lease-back transaction,
     Consumers could incur pursuant to the provisions described in the second
     sentence of the second paragraph under "Limitation on Liens," at least
     $1.00 of additional debt secured by liens (other than liens permitted by
     clause (1)), or

          (3) Consumers applies within 180 days an amount equal to, in the case
     of a sale or transfer for cash, the net proceeds (not exceeding the net
     book value), and, otherwise, an amount equal to the fair value (as
     determined by its Board of Directors) of the operating property so leased
     to the retirement of senior notes or other debt of Consumers ranking
     equally with, the senior notes, subject to reduction for senior notes and
     such debt retired during such 180-day period otherwise than pursuant to
     mandatory sinking fund or prepayment provisions and payments at stated
     maturity.

                                        13
<PAGE>

Voting Of Senior Note Mortgage Bonds Held By the Senior Note Trustee

     The senior note trustee, as the holder of first mortgage bonds securing
senior notes, will attend any meeting of bondholders under the mortgage
indenture, or, at its option, will deliver its proxy in connection therewith as
it relates to matters with respect to which it is entitled to vote or consent.
So long as no event of default under the senior note indenture has occurred and
is continuing, the senior note trustee will vote or consent:

          (1) in favor of amendments or modifications of the mortgage indenture
     of substantially the same tenor and effect as follows:

           - to eliminate the maintenance and replacement fund and to recover
             amounts of net property additions previously applied in
             satisfaction thereof so that the same would become available as a
             basis for the issuance of first mortgage bonds;

           - to eliminate sinking funds or improvement funds and to recover
             amounts of net property additions previously applied in
             satisfaction thereof so that the same would become available as a
             basis for the issuance of first mortgage bonds;

           - to eliminate the restriction on the payment of dividends on common
             stock and to eliminate the requirements in connection with the
             periodic examination of the mortgaged and pledged property by an
             independent engineer;

           - to permit first mortgage bonds to be issued under the mortgage
             indenture in a principal amount equal to 70% of unfunded net
             property additions instead of 60%, to permit sinking funds
             improvement funds requirements (to the extent not otherwise
             eliminated) under the Mortgage to be satisfied by the application
             of net property additions in an amount equal to 70% of such
             additions instead of 60%, and to permit the acquisition of property
             subject to certain liens prior to the lien of the Mortgage if the
             principal amount of indebtedness secured by such liens does not
             exceed 70% of the cost of such property instead of 60%;

           - to eliminate requirements that Consumers deliver a net earnings
             certificate for any purpose under the mortgage indenture;

           - to raise the minimum dollar amount of insurance proceeds on account
             of loss or damage that must be payable to the senior note trustee
             from $50,000 to an amount equal to the greater of (A) $5,000,000
             and (B) three per centum (3%) of the total principal amount of
             first mortgage bonds outstanding;

           - to increase the amount of the fair value of property which may be
             sold or disposed of free from the lien of the mortgage indenture,
             without any release or consent by the senior note trustee, from not
             more than $25,000 in any calendar year to not more than an amount
             equal to the greater of (A) $5,000,000 and (B) three per centum
             (3%) of the total principal amount of first mortgage bonds then
             outstanding;

           - to permit certain mortgaged and pledged property to be released
             from the lien of the mortgage indenture if, in addition to certain
             other conditions, the senior note trustee receives purchase money
             obligations of not more than 70% of the fair value of such property
             instead of 60% and to eliminate the further requirement for the
             release of such property that the total principal amount of
             purchase money obligations held by the senior note trustee not
             exceed 20% of the principal amount of first mortgage bonds
             outstanding;

           - to eliminate the restriction prohibiting the mortgage trustee from
             applying cash held by it pursuant to the mortgage indenture to the
             purchase of bonds not otherwise redeemable at a price exceeding
             110% of the principal of such bonds, plus accrued interest; and

          (2) with respect to any other amendments or modifications of the
     mortgage indenture, as follows: the senior note trustee shall vote all
     first mortgage bonds securing senior notes then held by it, or consent with
     respect thereto, proportionately with the vote or consent of the holders of
     all other
                                        14
<PAGE>

     first mortgage bonds outstanding under the mortgage indenture, the holders
     of which are eligible to vote or consent. However, the senior note trustee
     will not vote in favor of, or consent to, any amendment or modification of
     the mortgage which, if it were an amendment or modification of the senior
     note indenture, would require the consent of senior notes holders (as
     described under "Modification,") without the prior consent of holders of
     senior notes which would be required for such an amendment or modification
     of the senior note indenture.

Concerning The Senior Note Trustee

     The Chase Manhattan Bank is both the senior note trustee under the senior
note indenture and the mortgage trustee under the mortgage indenture. Consumers
and its affiliates maintain depositary and other normal banking relationships
with The Chase Manhattan Bank. The Chase Manhattan Bank is also a lender to
Consumers and its affiliates. The senior note indenture provides that Consumers'
obligations to compensate the senior note trustee and reimburse the senior note
trustee for expenses, disbursements and advances will constitute indebtedness
which will be secured by a lien generally prior to that of the senior notes upon
all property and funds held or collected by the senior note trustee as such.

DESCRIPTION OF FIRST MORTGAGE BONDS

General

     The first mortgage bonds securing senior notes are to be issued under a
mortgage indenture as amended and supplemented by various supplemental
indentures with The Chase Manhattan Bank, as the mortgage trustee. The
statements herein concerning the mortgage indenture are an outline and do not
purport to be complete and are subject to, and qualified in their entirety by,
all of the provisions of the mortgage indenture, which is incorporated by
reference herein. They make use of defined terms and are qualified in their
entirety by express reference to the cited sections and articles of the mortgage
indenture a copy of which will be available upon request to the senior note
trustee.

     First mortgage bonds securing senior notes will be issued as security for
Consumers' obligations under the senior note indenture and will be immediately
delivered to and registered in the name of the senior note trustee. The first
mortgage bonds securing senior notes will be issued as security for senior notes
of a series and will secure the senior notes of that series until the release
date. The senior note indenture provides that the senior note trustee shall not
transfer any first mortgage bonds securing senior notes except to a successor
trustee, to Consumers (as provided in the senior note indenture) or in
compliance with a court order in connection with a bankruptcy or reorganization
proceeding of Consumers. The senior note trustee shall generally vote the first
mortgage bonds securing senior notes proportionately with what it believes to be
the vote of all other first mortgage bonds then outstanding except in connection
with certain amendments or modifications of the mortgage indenture, as described
under "Description of Senior Notes Voting of Senior Note Mortgage Bonds Held by
Senior Note Trustee."

     First mortgage bonds securing senior notes will correspond to the senior
notes of its related series in respect of principal amount, interest rate,
maturity date and redemption provisions. Upon payment of the principal or
premium, if any, or interest on senior notes of a series, the related first
mortgage bonds in a principal amount equal to the principal amount of such
senior notes will, to the extent of such payment of principal, premium or
interest, be deemed fully paid and the obligation of Consumers to make such
payment shall be discharged.

Priority And Security

     The first mortgage bonds securing senior notes of any series will rank
equally as to security with bonds of other series now outstanding or issued
later under the mortgage indenture. This security is a direct first lien on
substantially all of Consumers' property and franchises (other than certain
property expressly excluded from the lien (such as cash, bonds, stock and
certain other securities, contracts, accounts and bills receivables, judgments
and other evidences of indebtedness, stock in trade, materials or supplies
manufactured or acquired for the purpose of sale and/or resale in the usual
course of business or

                                        15
<PAGE>

consumable in the operation of any of the properties of Consumers, natural gas,
oil and minerals, motor vehicles and certain real property listed in Schedule A
to the mortgage indenture)). This lien is subject to excepted encumbrances (and
certain other limitations) as defined and described in the mortgage indenture.
It is also subject to certain provisions of Michigan law which provides that
under certain circumstances, the State of Michigan's lien against property on
which it has incurred costs related to any response activity that is subordinate
to prior recorded liens can become superior to such prior liens pursuant to
court order. The mortgage indenture permits, with certain limitations, the
acquisition of property subject to prior liens and, under certain conditions,
permits the issuance of additional indebtedness under such prior liens to the
extent of 60% of net property additions made by Consumers to the property
subject to such prior liens.

Release And Substitution Of Property

     The mortgage indenture provides that, subject to various limitations,
property may be released from the lien thereof when sold or exchanged, or
contracted to be sold or exchanged, upon the basis of:

     - cash deposited with the mortgage trustee;

     - bonds or purchase money obligations delivered to the mortgage trustee;

     - prior lien bonds delivered to the mortgage trustee or reduced or assumed
       by the purchaser;

     - property additions acquired in exchange for the property released; or

     - upon a showing that unfunded net property additions exist. The mortgage
       indenture also permits the withdrawal of cash upon a showing that
       unfunded net property additions exist or against the deposit of bonds or
       the application thereof to the retirement of bonds.

Modification Of Mortgage

     The mortgage indenture, the rights and obligations of Consumers and the
rights of the bondholders may be modified by Consumers with the consent of the
holders of 75% in principal amount of the bonds and of not less than 60% of the
principal amount of each series affected. In general, however, no modification
of the terms of payment of principal or interest and no modification affecting
the lien or reducing the percentage required for modification is effective
against any bondholder without the bondholder's consent. Consumers has reserved
the right without any consent or other action by the holders of bonds of any
series created after September 15, 1993 or by the holder of any senior note or
exchange note, to amend the mortgage in order to substitute a majority in
principal amount of bonds outstanding under the mortgage for the 75% requirement
set forth above (and then only in respect of such series of outstanding bonds as
shall be affected by the proposed action) and to eliminate the requirement for a
series-by-series consent requirement.

Concerning The Mortgage Trustee

     The Chase Manhattan Bank is both the mortgage trustee under the mortgage
indenture and the senior note trustee under the senior note indenture. Consumers
and its affiliates maintain depositary and other normal banking relationships
with The Chase Manhattan Bank. The Chase Manhattan Bank is also a lender to
Consumers and its affiliates. The mortgage indenture provides that Consumers'
obligations to compensate the mortgage trustee and reimburse the trustee for
expenses, disbursements and advances will constitute indebtedness which will be
secured by a lien generally prior to that of the first mortgage bonds securing
senior notes upon all property and funds held or collected by the mortgage
trustee as such.

     The mortgage trustee or the holders of 20% in total principal amount of the
bonds may declare the principal due on default, but the holders of a majority in
total principal amount may annul such declaration and waive the default if the
default has been cured. Subject to certain limitations, the holders of a
majority in total principal amount may generally direct the time, method and
place of conducting any proceeding for the enforcement of the mortgage
indenture. No bondholder has the right to institute any

                                        16
<PAGE>

proceedings for the enforcement of the mortgage indenture unless that holder has
given the mortgage trustee written notice of a default, the holders of 20% of
outstanding bonds shall have tendered to the mortgage trustee reasonable
security or indemnity against costs, expenses and liabilities and requested the
mortgage trustee to take action, the mortgage trustee shall have declined to
take action or failed to do so within sixty days and no inconsistent directions
shall have been given by the holders of a majority in total principal amount of
the bonds.

Defaults

     The mortgage defines the following as "defaults":

     - failure to pay principal when due;

     - failure to pay interest for sixty days;

     - failure to pay any installment of any sinking or other purchase fund for
       ninety days;

     - certain events in bankruptcy, insolvency or reorganization; and

     - failure to perform any other covenant for ninety days following written
       demand by the mortgage trustee for Consumers to cure such failure.

     Consumers has covenanted to pay interest on any overdue principal and (to
the extent permitted by law) on overdue installments of interest, if any, on the
bonds under the mortgage indenture at the rate of 6% per year. The mortgage
indenture does not contain a provision requiring any periodic evidence to be
furnished as to the absence of default or as to compliance with the terms
thereof. However, Consumers is required by law to furnish annually to the
trustee a certificate as to compliance with all conditions and covenants under
the mortgage indenture.

SUBORDINATED DEBENTURES

     The subordinated debentures will be issued under the subordinated debt
indenture and will rank subordinated and junior in right of payment, to the
extent set forth in the subordinated debt indenture, to all "senior
indebtedness" (as defined below) of Consumers.

     If Consumers defaults in the payment of any distributions on any senior
indebtedness when it becomes due and payable after any applicable grace period,
then, unless and until the default is cured or waived or ceases to exist,
Consumers cannot make a payment on account of or redeem or otherwise acquire the
subordinated debentures. The subordinated debt indenture provisions described in
this paragraph, however, do not prevent Consumers from making sinking fund
payments in subordinated debentures acquired prior to the maturity of senior
indebtedness or, in the case of default, prior to such default and notice
thereof. If there is any insolvency, bankruptcy, liquidation or other similar
proceeding relating to Consumers, its creditors or its property, then all senior
indebtedness must be paid in full before any payment may be made to any holders
of subordinated debentures. Holders of subordinated debentures must return and
deliver any payments received by them, other than in a plan of reorganization or
through a defeasance trust as described above, directly to the holders of senior
indebtedness until all senior indebtedness is paid in full.

     "Senior indebtedness" means distributions on the following, whether
outstanding on the date of execution of the subordinated debt indenture or
thereafter incurred, created or assumed:

     - indebtedness of Consumers for money borrowed by Consumers or evidenced by
       debentures (other than the subordinated debentures), notes, bankers'
       acceptances or other corporate debt securities or similar instruments
       issued by Consumers;

     - capital lease obligations of Consumers;

                                        17
<PAGE>

     - obligations of Consumers incurred for deferring the purchase price of
       property, with respect to conditional sales, and under any title
       retention agreement (but excluding trade accounts payable arising in the
       ordinary course of business);

     - obligations of Consumers with respect to letters of credit;

     - all indebtedness of others of the type referred to in the four preceding
       clauses assumed by or guaranteed in any manner by Consumers or in effect
       guaranteed by Consumers; or

     - renewals, extensions or refundings of any of the indebtedness referred to
       in the preceding three clauses unless, in the case of any particular
       indebtedness, renewal, extension or refunding, under the express
       provisions of the instrument creating or evidencing the same or the
       assumption or guarantee of the same, or pursuant to which the same is
       outstanding, such indebtedness or such renewal, extension or refunding
       thereof is not superior in right of payment to the subordinated debt
       securities.

     The subordinated debt indenture does not limit the total amount of senior
indebtedness that may be issued. As of September 30, 2001, senior indebtedness
of Consumers totaled approximately $2,911 million.

Certain Covenants

     If debt securities are issued to a trust or a trustee of such trust in
connection with the issuance of trust preferred securities of that trust,
Consumers will covenant that it will not (1) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of Consumers' capital stock or (2) make any payment of
principal, interest or premium, if any, on or repay or repurchase or redeem any
debt securities (including guarantees of indebtedness for money borrowed) of
Consumers that rank equal (in the case of subordinated debentures) with or
junior (in the case of senior and subordinated debentures) to that debt security
(other than (a) any dividend, redemption, liquidation, interest, principal or
guarantee payment by Consumers where the payment is made by way of securities
(including capital stock) that rank equal with or junior to the securities on
which such dividend, redemption, interest, principal or guarantee payment is
being made, (b) payments under the Consumers' guarantees of trust securities),
if at such time (1) there shall have occurred any event of which Consumers has
actual knowledge that (a) with the giving of notice or the lapse of time, or
both, would constitute an event of default under the indentures and (b) in
respect of which Consumers shall not have taken reasonable steps to cure, (2)
Consumers shall be in default with respect to its payment of any obligations
under the guarantees or (3) Consumers will have given notice of its selection of
an extension period as provided in the indentures with respect to the Debt
Securities and will not have rescinded such notice, or such extension period, or
any extension thereof, shall be continuing.

     Consumers will also covenant:

          (1) to maintain directly or indirectly 100% ownership of the common
     securities, provided that certain successors that are permitted pursuant to
     the indentures may succeed to Consumers' ownership of the common
     securities,

          (2) not to voluntarily dissolve, wind-up or liquidate the trust,
     except:

             (a) in connection with a distribution of the debt securities to the
        holders of the trust preferred securities in liquidation of such trust
        or

             (b) in connection with certain mergers, consolidations or
        amalgamations permitted by the amended and restated Declaration of
        Trust, and

          (3) to use its reasonable efforts, consistent with the terms and
     provisions of the amended and restated Declaration of Trust, to cause such
     trust to remain classified as a grantor trust and not as an association
     taxable as a corporation for United States federal income tax purposes.

                                        18
<PAGE>

Events of Default

     The subordinated debt indenture provides that events of default regarding
any series of subordinated debentures will be:

     - failure to pay required interest on any subordinated debentures of such
       series for 30 days;

     - failure to pay principal other than a scheduled installment payment or
       premium, if any, on any subordinated note of such series when due;

     - failure to make any required scheduled installment payment on
       subordinates notes of such series;

     - failure to perform for 60 days after notice any other covenant in the
       relevant indenture other than a covenant included in the relevant
       indenture solely for the benefit of a series of subordinated debentures
       other than such series;

     - certain events of bankruptcy or insolvency, whether voluntary or not; and

     - if subordinated debentures are issued, such trust is voluntarily or
       involuntarily dissolved, wound-up or terminated, except in connection
       with the distribution of subordinated debentures to the holders of the
       common securities and the trust preferred securities in liquidation of
       the trust, the redemption of all outstanding trust securities of the
       trust and certain mergers, consolidation or amalgamations permitted by
       the declaration of that trust.

     If an event of default regarding subordinated debentures of any series
issued should occur and be continuing, either the subordinated note trustee or
the holders of 25% in the principal amount of outstanding subordinated
debentures of such series may declare each subordinated note of that series due
and payable.

     Holders of a majority in principal amount of the outstanding subordinated
debentures of any series will be entitled to control certain actions of the
subordinated note trustee and to waive past defaults regarding such series. The
trustee generally will not be requested, ordered or directed by any of the
holders of subordinated debentures, unless one or more of such holders shall
have offered to the trustee reasonable security or indemnity.

     Before any holder of any series of subordinated debentures may institute
action for any remedy, except payment on such holder's subordinated debentures
when due, the holders of not less than 25% in principal amount of the
subordinated debentures of that series outstanding must request the subordinated
note trustee to take action. Holders must also offer and give the satisfactory
security and indemnity against liabilities incurred by the trustee for taking
such action.

     Consumers is required to annually furnish the subordinated note trustee a
statement as to Consumers' compliance with all conditions and covenants under
the subordinated debt indenture. The subordinated debt indenture provides that
the subordinated note trustee may withhold notice to the holders of the
subordinated debentures of any series of any default affecting such series,
except payment on holders' subordinated debentures when due, if it considers
withholding notice to be in the interests of the holders of the subordinated
debentures of such series.

Consolidation, Merger or Sale of Assets

     The subordinated debt indenture provides that Consumers may consolidate
with or merge into, or sell, lease or convey its property as an entirety or
substantially as an entirety to, any other corporation if the new corporation
assumes the obligations of Consumers under the subordinated debentures and the
subordinated debt indenture and is organized and existing under the laws of the
United States of America, any U.S. state or the District of Columbia.

                                        19
<PAGE>

Modification of the Indenture

     The subordinated debt indenture permits Consumers and the subordinated note
trustee to enter into supplemental indentures without the consent of the holders
of the subordinated debentures to establish the form and terms of any series of
securities under the subordinated debt indentures.

     The subordinated debt indenture also permits Consumers and the subordinated
note trustee, with the consent of the holders of at least a majority in total
principal amount of the subordinated debentures of all series then outstanding
and affected (voting as one class), to change in any manner the provisions of
the subordinated debt indenture or modify in any manner the rights of the
holders of the subordinated debentures of each such affected series. Consumers
and the relevant trustee may not, without the consent of the holder of each
subordinated debenture affected, enter into any supplemental indenture to:

     - change the time of payment of the principal;

     - reduce the principal amount of such subordinated debentures;

     - reduce the rate or change the time of payment of interest on such
       subordinated debentures;

     - impair the right to institute suit for the enforcement of any payment on
       any subordinated debentures when due.

     In addition, no such modification may reduce the percentage in principal
amount of the subordinated debentures of the affected series, the consent of
whose holders is required for any such modification or for any waiver provided
for in the subordinated debt indenture.

     Prior to the acceleration of the maturity of any subordinated debentures,
the holders, voting as one class, of a majority in total principal amount of the
subordinated debentures with respect to which a default or event of default has
occurred and is continuing, may, on behalf of the holders of all such affected
subordinated debentures, waive any past default or event of default and its
consequences, except a default or an event of default in respect of a covenant
or provision of the applicable indenture or of any subordinated debenture which
cannot be modified or amended without the consent of the holder of each
subordinated debentures affected.

Defeasance, Covenant Defeasance and Discharge

     The subordinated debt indenture provides that, at the option of Consumers,
Consumers will be discharged from all obligations in respect of the subordinated
debentures of a particular series then outstanding (except for certain
obligations to register the transfer of or exchange the subordinated debentures
of such series, to replace stolen, lost or mutilated subordinated debentures of
such series, to maintain paying agencies and to maintain the trust described
below).

     If Consumers in each case irrevocably deposits in trust with the relevant
trustee money, and/or securities backed by the full faith and credit of the
United States which, through the payment of the principal thereof and the
interest thereon in accordance with their terms, will provide money in an amount
sufficient to pay all the principal and interest on the subordinated debentures
of such series on the stated maturities of such subordinated debentures in
accordance with the terms thereof.

     To exercise this option, Consumers is required to deliver to the relevant
trustee an opinion of independent counsel to the effect that the exercise of
such option would not cause the holders of the subordinated debentures of such
series to recognize income, gain or loss for United States federal income tax
purposes as a result of such defeasance, and such holders will be subject to
United States federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such defeasance had not occurred.

TRUST PREFERRED SECURITIES

     Each trust may issue, on one or more occasion, trust preferred securities
having terms described in the applicable prospectus supplement. The amended and
restated Declaration of Trust of each trust will
                                        20
<PAGE>

authorize the establishment of no more than one series of trust preferred
securities, having such terms, including distributions, redemption, voting,
liquidation rights and such other preferred, deferred or other special rights or
such rights or restrictions as shall be set forth therein or otherwise
established by the trustees pursuant thereto. Reference is made to the
prospectus supplement relating to the trust preferred securities for specific
terms, including:

     - the distinctive designation and the number of trust preferred securities
       to be offered which will represent undivided beneficial interests in the
       assets of the trust;

     - the annual distribution rate and the dates or date upon which such
       distributions will be paid, provided, however distributions on the trust
       preferred securities will be paid quarterly in arrears to holders of
       trust preferred securities as of a record date on which the trust
       preferred securities are outstanding;

     - whether distributions on trust preferred securities would be deferred
       during any deferral of interest payments on the debt securities,
       provided, however that no such deferral, including extensions, if any,
       may exceed 20 consecutive quarters nor extend beyond the stated maturity
       date of the debt securities, and at the end of any such deferrals,
       Consumers will make all interest payments then accrued or deferred and
       unpaid (including any compounded interest);

     - the amount of any liquidation preference;

     - the obligation, if any, of the trust to redeem trust preferred securities
       through the exercise of Consumers of an option on the corresponding debt
       securities and the price or prices at which, the period or periods within
       which and the terms and conditions upon which trust preferred securities
       will be purchased or redeemed, in whole or in part, under to such
       obligation;

     - the period or periods within which and the terms and conditions, if any,
       including the price or prices or the rate or rates of conversion or
       exchange and the terms and conditions of any adjustments, upon which the
       trust preferred securities shall be convertible or exchangeable at the
       option of the holder of the trust preferred securities of other property
       or cash;

     - the voting rights, if any, of the trust preferred securities in addition
       to those required by law and in the amended and restated Declaration of
       Trust, or set forth under a Consumers' guarantee (as defined below);

     - the additional payments, if any, which the trust will pay as a
       distribution as necessary so that the net amounts reserved by the trust
       and distributable to the holders of the trust preferred securities, after
       all taxes, duties, assessments or governmental charges of whatever nature
       (other than withholding taxes) have been paid will not be less than the
       amount that would have been reserved and distributed by the trust, and
       the amount the holders of the trust preferred securities would have
       reserved, had no such taxes, duties, assessments or governmental charges
       been imposed;

     - the terms and conditions, if any, upon which the debt securities may be
       distributed to holders of trust preferred securities; and

     - any other relative rights, powers, preferences, privileges, limitations
       or restrictions of the trust preferred securities not inconsistent with
       the amended and restated Declaration of Trust or applicable law.

     All trust preferred securities offered hereby will be irrevocably
guaranteed by Consumers, on a senior or subordinated basis, as applicable, and
to the extent set forth below under "The Guarantees." Any applicable federal
income tax considerations applicable to any offering of the trust preferred
securities will be described in the prospectus supplement relating thereto. The
total number of trust preferred securities which the trust shall have authority
to issue will be pursuant to the terms of the amended and restated Declaration
of Trust.

                                        21
<PAGE>

EFFECT OF OBLIGATIONS UNDER THE DEBT SECURITIES AND THE GUARANTEES

     As set forth in the amended and restated Declaration of Trust, the sole
purpose of the trusts are to issue the common securities and the trust preferred
securities evidencing undivided beneficial interests in the assets of each of
the trusts, and to invest the proceeds from such issuance and sale to acquire
directly the debt securities from Consumers.

     As long as payments of interest and other payments are made when due on the
debt securities, such payments will be sufficient to cover distributions and
payments due on the common securities and the trust preferred securities because
of the following factors:

     - the total principal amount of debt securities will be equal to the sums
       of the total stated liquidation amount of the common securities and the
       trust preferred securities;

     - the interest rate and the interest and other payment dates on the debt
       securities will match the distribution rate and distribution and other
       payment dates for the common securities and the trust preferred
       securities;

     - Consumers will pay all, and each trust shall not be obligated to pay,
       directly or indirectly, all its costs, expenses, debt and obligations
       (other than with respect to the common securities and the trust preferred
       securities); and

     - the amended and restated Declaration of Trust further provides that
       Consumers trustees will not take or cause or permit the trust to, among
       other things, engage in any activity that is not consistent with the
       purposes of the trust.

     Payments of distributions (to the extent funds for distributions are
available) and other payments due on the trust preferred securities (to the
extent funds for other payments are available) are guaranteed by Consumers as
and to the extent discussed under "The Guarantees" below. If Consumers does not
make interest payments on the debt securities purchased by the trust, it is
expected that the trusts will not have sufficient funds to pay distributions on
the trust preferred securities. The Consumers guarantees do not apply to any
payment of distributions unless and until the trusts have sufficient funds for
the payment of distributions and other payments on the trust preferred
securities only if and to the extent that Consumers has made a payment of
interest or principal on the debt securities held by the trusts as their sole
asset. The Consumers guarantees, when taken together with Consumers' obligations
under the debt securities and the related indenture and its obligations under
the applicable amended and restated Declaration of Trust, including its
obligations to pay costs, expenses, debts and liabilities of the trust (other
than with respect to the common securities and the trust preferred securities),
provide a full and unconditional guarantee of amounts on the trust preferred
securities.

     If Consumers fails to make interest or other payments on the debt
securities when due (taking account of any extension period), the applicable
amended and restated Declaration of Trust provide a mechanism whereby the
holders of the trust preferred securities may direct a property trustee to
enforce its rights under the debt securities. If a property trustee fails to
enforce its rights under the debt securities, a holder of trust preferred
securities may, to the fullest extent permitted by applicable law, institute a
legal proceeding against Consumers to enforce a property trustee's rights under
the debt securities without first instituting any legal proceeding against a
property trustee or any other person or entity. Notwithstanding the foregoing,
if an event of default has occurred and is continuing under the applicable
amended and restated Declaration of Trust, and such event is attributable to the
failure of Consumers to pay interest or principal on the debt securities on the
date such interest or principal is otherwise payable (or in the case of
redemption on the redemption date), then a holder of trust preferred securities
may institute legal proceedings directly against Consumers to obtain payment. If
Consumers fails to make payments under the guarantees, the guarantees provide a
mechanism whereby the holders of the trust preferred securities may direct a
guarantee trustee to enforce its rights thereunder. Any holder of trust
preferred securities may institute a legal proceeding directly against Consumers
to enforce a guarantee trustee's rights under a guarantee without first
instituting a legal proceeding against the trust, the guarantee trustee, or any
other person or entity.
                                        22
<PAGE>

THE GUARANTEES

     Set forth below is a summary of information concerning the guarantees that
will be executed and delivered by Consumers for the benefit of the holders, from
time to time, of the trust preferred securities. Each guarantee will be
qualified as an indenture under the Trust Indenture Act of 1939. The Bank of New
York will act as indenture trustee under the guarantees for the purpose of
compliance with the provisions of the Trust Indenture Act of 1939. This summary
does not purport to be complete and is subject in all respects to the provisions
of, and is qualified in its entirety by reference to, the guarantees, which is
filed as an exhibit to the Registration Statement of which this prospectus forms
a part.

General

     Consumers will irrevocably agree to pay in full, on a senior or
subordinated basis, as applicable, to the extent set forth herein, the guarantee
payments (as described below) to the holders of the trust preferred securities,
as and when due, regardless of any defense, right of set-off or counterclaim
that the trust may have or assert other than the defense of payment. The
following payments with respect to the trust preferred securities, to the extent
not paid by or on behalf of the trust, will be subject to a guarantee by
Consumers of:

          (1) any accumulated and unpaid distributions required to be paid on
     the trust preferred securities, to the extent that the trust has funds on
     hand available therefore at such time;

          (2) the redemption price with respect to any trust preferred
     securities called for redemption to the extent that the trust has funds on
     hand available therefore at such time; or

          (3) upon a voluntary or involuntary dissolution, winding up or
     liquidation of the trust (unless the debt securities are distributed to
     holders of the trust preferred securities), the lesser of (a) the
     liquidation distribution, to the extent that the trust has funds on hand
     available the distribution at such time, and (b) the amount of assets of
     the trust remaining available for distribution to holders of trust
     preferred securities.

     Consumers' obligation to make a guarantee payment may be satisfied by
direct payment of the required amounts of Consumers to the holders of the trust
preferred securities or by causing the trust to pay such amount to such holders.

     The Consumers guarantees will be irrevocable guarantees, on a senior or
subordinated basis, as applicable, of the trust's obligations under the trust
preferred securities, but will apply only to the extent that the trust has funds
sufficient to make such payments, and are not guarantees of collection. If
Consumers does not make interest payments on the debt securities held by the
trust, the trust will not be able to pay distributions on the trust preferred
securities and will not have funds legally available therefore.

     Consumers has, through the guarantees, the applicable amended and restated
Declaration of Trust, the senior notes, the subordinated debentures, and the
indentures, taken together, fully, irrevocably and unconditionally guaranteed
all of the trust's obligations under the trust preferred securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the trust's obligations under the trust preferred
securities.

     Consumers has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the trust with respect to the common securities to
the same extent as the guarantees of the preferred securities, except that upon
the occurrence and during the continuation of a amended and restated Declaration
of Trust Event of Default, holders of trust preferred securities shall have
priority over holders of common securities with respect to distributions and
payments on liquidation, redemption or otherwise.

                                        23
<PAGE>

Certain Covenants of Consumers

     Consumers will also covenant that it will not

          (1) declare or pay any dividends or distributions on, or redeem,
     purchase, acquire, or make a liquidation payment with respect to, any of
     Consumers' capital stock or

          (2) make any payment of principal, interest or premium, if any, on or
     repay or repurchase or redeem any debt securities (including guarantees of
     indebtedness for money borrowed) of Consumers that rank equal (in the case
     of subordinated debentures with or junior in the case of the senior and
     subordinated debentures) to the debt securities (other than (a) any
     dividend, redemption, liquidation, interest, principal or guarantee payment
     by Consumers where the payment is made by way of securities (including
     capital stock) that rank equal with or junior to the securities on which
     such dividend, redemption, interest, principal or guarantee payment is
     being made, (b) payments under the Consumers guarantees of the trust
     securities, (c) as a result of a reclassification of Consumers' capital
     stock or the exchange or conversion of one series or class of Consumers'
     capital stock for another series or class of Consumers' capital stock and
     (d) the purchase of fractional interests in shares of Consumers' capital
     stock pursuant to the conversion or exchange provisions of such capital
     stock or the security being converted or exchanged) if at such time (1)
     there shall have occurred any event of which Consumers has actual knowledge
     that (a) with the giving of notice or the lapse of time, or both, would
     constitute a event of default and (b) in respect of which Consumers shall
     not have taken reasonable steps to cure, (2) Consumers shall be in default
     with respect to its payment of any obligations under the guarantee or

          (3) Consumers shall have given notice of its selection of an extension
     period as provided in the indentures with respect to the debt securities
     and shall not have rescinded such notice, or such extension period, or any
     extension thereof, shall be continuing.

     Consumers also will covenant to:

          (1) maintain directly or indirectly 100% ownership of the common
     securities, provided that certain successors which are permitted pursuant
     to the indentures may succeed to Consumers' ownership of the common
     securities,

          (2) not voluntarily dissolve, wind-up or liquidate the trust, except:

             - in connection with a distribution of the debt securities to the
               holders of the trust preferred securities in liquidation of the
               trust, or

             - in connection with certain mergers, consolidations or
               amalgamations permitted by the amended and restated Declaration
               of Trust, and

          (3) use its reasonable efforts, consistent with the terms and
     provisions of the applicable amended and restated Declaration of Trust, to
     cause the trust to remain classified as a grantor trust and not as an
     association taxable as a corporation for United States federal income tax
     purposes.

Amendments and Assignment

     Except with respect to any changes which do not materially adversely affect
the rights of holders of the trust preferred securities (in which case no vote
will be required), the Consumers guarantees of the trust preferred securities
may not be amended without the prior approval of the holders of not less than a
majority in total liquidation amount of such outstanding trust preferred
securities. All guarantees and agreements contained in the guarantees shall bind
the successors, assigns, receivers, trustees and representatives of Consumers
and shall inure to the benefit of the holders of the trust preferred securities
then outstanding.

                                        24
<PAGE>

Termination of the Guarantees

     The Consumers guarantees of the trust preferred securities will terminate
and be of no further force and effect upon full payment of the redemption price
of the trust preferred securities, upon full payment of the amounts payable upon
liquidation of the trust or upon distribution of the debt securities to the
holders of the trust preferred securities in exchange for all of the trust
preferred securities. The guarantees will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of trust preferred
securities must restore payment of any sums paid under such trust preferred
securities or the guarantees.

Events of Default

     An event of default under a Consumers guarantee of the trust preferred
securities will occur upon the failure of Consumers to perform any of its
payment or other obligations thereunder. The holders of a majority in total
liquidation amount of the trust preferred securities have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to a guarantee trustee in respect of a guarantee or to direct the exercise of
any trust or power conferred upon a guarantee trustee under the guarantees.

     If a guarantee trustee fails to enforce a Consumers guarantee of the trust
preferred securities, any holder of the trust preferred securities may institute
a legal proceeding directly against Consumers to enforce its rights under such
guarantee without first instituting a legal proceeding against the trust, the
guarantee trustee or any other person or entity. In addition, any record holder
of trust preferred securities shall have the right, which is absolute and
unconditional, to proceed directly against Consumers to obtain guarantee
payments, without first waiting to determine if the guarantee trustee has
enforced a guarantee or instituting a legal proceeding against the trust, the
guarantee trustee or any other person or entity. Consumers has waived any right
or remedy to require that any action be brought just against the trust, or any
other person or entity before proceeding directly against Consumers.

Status of the Guarantees

     The Consumers guarantee of the trust preferred securities will constitute
unsecured obligations of Consumers and will rank:

          (1) equal to or subordinate and junior in right of payment to all
     other liabilities of Consumers, as applicable,

          (2) equal with the most senior preferred stock now or hereafter issued
     by Consumers and with any guarantee now or hereafter entered into by
     Consumers in respect of any preferred or preference stock of any affiliate
     of Consumers, and

          (3) senior to Consumers' common stock.

     The Consumers guarantee of the trust preferred securities will constitute a
guarantee of payment and not of collection (i.e., the guaranteed party may
institute a legal proceeding directly against the guarantor to enforce its
rights under the guarantee without first instituting a legal proceeding against
any other person or entity). The guarantees will be held for the benefit of the
holders of the trust preferred securities. The guarantees will not be discharged
except by payment of the guarantee payments in full to the extent not paid by
the trust or upon distribution of the debt securities to the holders of the
trust preferred securities. The guarantees do not place a limitation on the
amount of additional indebtedness that may be incurred by Consumers.

                                        25
<PAGE>

                              PLAN OF DISTRIBUTION

     Consumers and/or the trusts may sell the offered securities:

          (1) through the solicitation of proposals of underwriters or dealers
     to purchase the offered securities;

          (2) through underwriters or dealers on a negotiated basis;

          (3) directly to a limited number of purchasers or to a single
     purchaser; or

          (4) through agents.

     The prospectus supplement with respect to any offered securities will set
forth the terms of such offering, including the name or names of any
underwriters, dealers or agents; the purchase price of the offered securities
and the proceeds to Consumers and/or the trust from such sale; any underwriting
discounts and commissions and other items constituting underwriters'
compensation; any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers and any securities exchange on which
such offered securities may be listed. Any initial public offering price,
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.

     If underwriters are used in the sale, the offered securities will be
acquired by the underwriters for their own account and may be resold on one or
more occasions in one or more transactions, including negotiated transactions,
at a fixed public offering price or at varying prices determined at the time of
sale. The offered securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more firms acting as underwriters. The underwriter or
underwriters with respect to a particular underwritten offering offered
securities will be named in the prospectus supplement relating to such offering
and, if an underwriting syndicate is used, the managing underwriter or
underwriters will be set forth on the cover of such prospectus supplement.
Unless otherwise set forth in the prospectus supplement relating thereto, the
obligations of the underwriters to purchase the offered securities will be
subject to certain conditions precedent, and the underwriters will be obligated
to purchase all the offered securities if any are purchased.

     If dealers are utilized in the sale of offered securities, Consumers and/or
the trusts will sell such offered securities to the dealers as principals. The
dealers may then resell such offered securities to the public at varying prices
to be determined by such dealers at the time of resale. The names of the dealers
and the terms of the transaction will be set forth in the prospectus supplement
relating thereto.

     The offered securities may be sold directly by Consumers and/or the trusts
or through agents designated by Consumers and/or the trusts from time to time.
Any agent involved in the offer or sale of the offered securities in respect to
which this prospectus is delivered will be named, and any commissions payable by
Consumers and/or the trusts to such agent will be set forth, in the prospectus
supplement relating thereto. Unless otherwise indicated in the prospectus
supplement, any such agent will be acting on a best efforts basis for the period
of its appointment.

     The offered securities may be sold directly by Consumers and/or the trusts
to institutional investors or others, who may be deemed to be underwriters
within the meaning of the Securities Act with respect to any resale thereof. The
terms of any such sales will be described in the prospectus supplement relating
thereto.

     Agents, dealers and underwriters may be entitled under agreements with
Consumers and/or the trusts to indemnification by Consumers and/or the trust
against certain civil liabilities, including liabilities under the Securities
Act, or to contribution with respect to payments which such agents, dealers or
underwriters may be required to make in respect thereof. Agents, dealers and
underwriters may be customers of, engage in transactions with, or perform
services for Consumers and/or the trust in the ordinary course of business.

     The offered securities may also be offered and sold, if so indicated in the
applicable prospectus supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment pursuant to their terms,
or otherwise, by one or more firms ("remarketing firms"), acting as
                                        26
<PAGE>

principals for their own accounts or as agents for Consumers and/or the trusts.
Any remarketing firm will be identified and the terms of its agreement, if any,
with its compensation will be described in the applicable prospectus supplement.
Remarketing firms may be deemed to be underwriters, as such term is defined in
the Securities Act, in connection with the offered securities remarketed
thereby. Remarketing firms may be entitled under agreements which may be entered
into with Consumers and/or the trusts to indemnification or contribution by
Consumers and/or the trusts against certain civil liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions or perform services for Consumers and its subsidiaries in the
ordinary course of business.

     The offered securities may or may not be listed on a national securities
exchange. Reference is made to the prospectus supplement with regard to such
matter. No assurance can be given that there will be a market for any of the
offered securities.

                                 LEGAL OPINIONS

     Opinions as to the legality of certain of the offered securities will be
rendered for Consumers by Michael D. Van Hemert, Esq., Assistant General Counsel
for CMS Energy Corporation, the parent of Consumers. Certain matters of Delaware
law relating to the validity of the trust preferred securities will be passed
upon on behalf of the trusts by Skadden, Arps, Slate, Meagher & Flom LLP,
special Delaware counsel to the trusts. Certain United States federal income
taxation matters may be passed upon for Consumers and the trust by either
Theodore Vogel, Vice President and Tax Counsel for CMS Energy Corporation, or by
special tax counsel to Consumers and of the trust, who will be named in the
prospectus supplement. Certain legal matters with respect to offered securities
will be passed upon by counsel for any underwriters, dealers or agents, each of
whom will be named in the related prospectus supplement.

     As of November 21, 2001, Mr. Van Hemert beneficially owned approximately
6,000 shares of CMS Energy Common Stock. As of November 21, 2001, an attorney
currently employed by Skadden, Arps, Slate, Meagher & Flom LLP and formerly
employed by CMS Energy, owned approximately 51,734 shares of CMS Common Stock,
10 shares of Consumers $4.50 series preferred stock, $100 per value and $50,000
aggregate principal amount of certain debt securities issued by CMS Energy. From
time to time, Skadden, Arps, Slate, Meagher & Flom LLP has represented CMS
Energy, the Company and their affiliates. As of November 21, 2001, Mr. Vogel
beneficially owned approximately 8,000 shares of CMS Energy Common Stock.

                                    EXPERTS

     The consolidated financial statements and schedule of Consumers as of
December 31, 2000 and 1999 and for each of the three years in the period ended
December 31, 2000 incorporated by reference in this prospectus, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.

     With respect to the unaudited interim consolidated financial information
for the periods ended March 31, 2001, June 30, 2001 and September 30, 2001,
Arthur Andersen LLP has applied limited procedures in accordance with
professional standards for a review of that information. However, their separate
reports thereon state that they did not audit and they did not express an
opinion on that interim consolidated financial information.

     Accordingly, the degree of reliance on their reports on that information
should be restricted in light of the limited nature of the review procedures
applied. In addition, the accountants are not subject to the liability
provisions of Section 11 of the Securities Act, for their reports on the
unaudited interim consolidated financial information because these reports are
not "reports" or a part of the registration statement prepared or certified by
the accountants within the meaning of Sections 7 and 11 of the Securities Act.

                                        27
<PAGE>

     Future consolidated financial statements of Consumers and the reports
thereon of Arthur Andersen LLP also will be incorporated by reference in this
prospectus in reliance upon the authority of that firm as experts in giving
those reports to the extent that said firm has audited said consolidated
financial statements and consented to the use of their reports thereon.

                                        28
<PAGE>

                                    PART II.

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

<Table>
<Caption>
                                                               AMOUNT
                                                              --------
<S>                                                           <C>
Filing fee -- Securities and Exchange Commission............  $112,500
*Listing on New York Stock Exchange.........................
*Trustees expenses..........................................    15,000
*Printing and Engraving.....................................   200,000
*Services of counsel........................................    35,000
*Services of independent public accountants, Arthur Andersen
  LLP.......................................................    10,000
*Rating Agency Fees, Collateral Agent's and Purchase
  Contract Agent's Fees.....................................    68,000
*Blue Sky fees and expenses.................................    10,000
*Miscellaneous..............................................    10,000
                                                              --------
          Total.............................................  $560,500
                                                              ========
</Table>

- ---------------

* Estimated

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     The following resolution was adopted by the Board of Directors of Consumers
on May 6, 1987:

     RESOLVED: That effective March 1, 1987 the Company shall indemnify to the
full extent permitted by law every person (including the estate, heirs and legal
representatives of such person in the event of the decease, incompetency,
insolvency or bankruptcy of such person) who is or was a director, officer,
partner, trustee, employee or agent of the Company, or is or was serving at the
request of the Company as a director, officer, partner, trustee, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against all liability, costs, expenses, including attorneys' fees,
judgments, penalties, fines and amounts paid in settlement, incurred by or
imposed upon the person connection with or resulting from any claim or any
threatened, pending or completed action, suit or proceeding whether civil,
criminal, administrative, investigative or of whatever nature, arising from the
person's service or capacity as, or by reason of the fact that the person is or
was, a director, officer, partner, trustee, employee or agent of the Company or
is or was serving at the request of the Company as a director, officer, partner,
trustee, employee or agent of another corporation partnership, joint venture,
trust or other enterprise. Such right of indemnification shall not be deemed
exclusive of any other rights to which the person may be entitled under statute,
bylaw, agreement, vote of shareholders or otherwise.

     Article XIII, Section 1 of Consumers Bylaws provides:

     The Company may purchase and maintain liability insurance, to the full
extent permitted by law, on behalf of any person who is or was a director,
officer, employee or agent of the Company, or is or was serving at the request
of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred by such person in any such capacity.

     Article V of Consumers Restated Articles of Incorporation reads:

     A director shall not be personally liable to the Company or its
shareholders for monetary damages for breach of duty as a director except (i)
for a breach of the director's duty of loyalty to the Company or its
shareholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for a violation of
Section 551(1) of the Michigan Business Corporation Act, and (iv) any
transaction from which the director derived an improper personal benefit. No
amendment to or repeal of this Article V, and no modification to its provisions
by law, shall apply to, or have any effect

                                       II-1
<PAGE>

upon, the liability or alleged liability of any director of the Company for or
with respect to any acts or omissions of such director occurring prior to such
amendment, repeal or modification.

     Article VI of Consumers Restated Articles of Incorporation reads:

     Each director and each officer of the Company shall be indemnified by the
Company to the fullest extent permitted by law against expenses (including
attorneys' fees), judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him or her in connection with the defense of
any proceeding in which he or she was or is a party or is threatened to be made
a party by reason of being or having been a director or an officer of the
Company. Such right of indemnification is not exclusive of any other rights to
which such director or officer may be entitled under any now or thereafter
existing statute, any other provision of these Articles, bylaw, agreement, vote
of shareholders or otherwise. If Business Corporation Act of the State of
Michigan is amended after approval by the shareholders of this Article VI to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Company shall be
eliminated or limited to the fullest extent permitted by the Business
Corporation Act of the State of Michigan, as so amended. Any repeal or
modification of this Article VI by the shareholders of the Company shall not
adversely affect any right or protection of a director of the Company existing
at the time of such repeal or modification.

     Sections 561 through 569 of the Michigan Business Corporation Act provides
Consumers with the power to indemnify directors, officers, employees and agents
against certain expenses and payments, and to purchase and maintain insurance on
behalf of directors, officers, employees and agents.

     Officers and directors are covered within specified monetary limits by
insurance against certain losses arising from claims made by reason of their
being directors or officers of Consumers or of Consumers' subsidiaries and
Consumers' officers and directors are indemnified against such losses by reason
of their being or having been directors or officers of another corporation,
partnership, joint venture, trust or other enterprise at Consumers' request. In
addition, Consumers has indemnified each of its present directors by contracts
that contain affirmative provisions essentially similar to those in Sections 561
through 569 of the Michigan Business Corporation Act cited above.

     Officers and directors and Regular Trustees of the trust are covered within
specified monetary limits by insurance against certain losses arising from
claims made by reason of their being directors or officers of Consumers or of
Consumers' subsidiaries and Consumers' officers and directors are indemnified
against such losses by reason of their being or having been directors or
officers of another corporation, partnership, joint venture, trust or other
enterprise at Consumers' request. In addition, Consumers has indemnified each of
its present directors by contracts that contain affirmative provisions
essentially similar to those in sections 561 through 569 of the Michigan
Business Corporation Act cited above.

     The amended and restated Declaration of Trust provides that to the fullest
extent permitted by applicable law, Consumers shall indemnify and hold harmless
each of the Trustees, any Affiliate of the Trustees, any officer, director,
shareholder, employee, representative or agent of any Trustee and any employee
or agent of the trust or its Affiliates (each a "Indemnified Person"), from and
against any loss, damage, liability, tax, penalty, expense or claim of any kind
or nature whatsoever incurred by such Indemnified Person by reason the creation,
operation or termination of the trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by the amended and restated
Declaration of Trust, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or willful misconduct with respect to such acts
or omissions.

     Exhibits listed above which have been filed with the Securities and
Exchange Commission are incorporated herein by reference with the same effect as
if filed with this Registration Statement.

                                       II-2
<PAGE>

ITEM 16. EXHIBITS.

<Table>
<Caption>
EXHIBIT
  NO.                                  DESCRIPTION
- --------                               -----------
<C>       <S>  <C>
 *(1)(a)  --   Form of Underwriting Agreement with respect to the trust
               preferred securities. (Designated in Consumers' Registration
               Statement on Form S-3, dated October 20, 1999, File No.
               333-89363, as Exhibit (1)(a).)
 *(1)(b)  --   Form of Underwriting Agreement with respect to the offered
               securities (other than the trust preferred securities).
               (Designated in Consumers Registration Statement on Form S-3,
               dated June 7, 2001, File No. 333-62500 as Exhibit (1)(b).)
  (1)(c)  --   Underwriting agreement dated as of October 31, 2001 among
               Consumers Energy Company, Consumers Funding LLC and Morgan
               Stanley & Co. Incorporated on behalf of itself and as the
               representative of the several underwriters named therein.
 *(4)(a)  --   Restated Articles of Incorporation of Consumers. (Designated
               in Consumers' Form 10-K for the year ended December 31,
               2000, File No. 1-5611, as Exhibit (3)(c).)
 *(4)(b)  --   By-Laws of Consumers (Designated in Consumers' Form 10-K,
               for the year ended December 31, 1999, File No. 1-5611, as
               Exhibit (3)(d).)
 *(4)(c)  --   Indenture dated as of January 1, 1996 between Consumers
               Energy Company and The Bank of New York, as Trustee.
               (Designated in Consumers' Form 10-K for the year ended
               December 31, 1995, File No. 1-5611, as Exhibit (4)(b).)
          --   Indentures Supplemental thereto:
   *      --   First Supplemental Indenture dated as of January 18, 1996
               between Consumers Energy Company and The Bank of New York,
               as Trustee. (Designated in Consumers' Form 10-K for the year
               ended December 31, 1995, File No. 1-5611, as Exhibit
               (4)(b).)
   *      --   Second Supplemental Indenture dated as of September 4, 1997
               between Consumers Energy Company and The Bank of New York,
               as Trustee. (Designated in Consumers' Form 10-Q for the
               quarter ended September 30, 1997, File No. 1-5611, as
               Exhibit (4)(a).)
   *      --   Third Supplemental Indenture dated as of November 4, 1999
               between Consumers Energy Company and The Bank of New York,
               as Trustee. (Designated in Consumers' Form 10-Q for the
               quarter ended September 30, 1999, File No. 1-5611, as
               Exhibit (4)(a).)
   *      --   Fourth Supplemental Indenture dated as of May 31, 2001
               between Consumers Energy Company and The Bank of New York,
               as Trustee. (Designated in Consumers' Form 10-Q for the
               quarter ended September 30, 2001, File No. 1-5611, as
               Exhibit (4)(a).)
 *(4)(d)  --   Indenture dated as of February 1, 1998 between Consumers
               Energy Company and The Chase Manhattan Bank, as Trustee.
               (Designated in Consumers' Form 10-K for the year ended
               December 31, 1997, File No. 1-5611, as Exhibit (4)(c).)
          --   Indentures Supplemental thereto:
   *      --   First Supplemental Indenture dated as of May 1, 1998 between
               Consumers Energy Company and The Chase Manhattan Bank, as
               Trustee. (Designated in Consumers' Form 10-Q for the quarter
               ended March 31, 1998, File No. 1-5611, as Exhibit (4)(a).)
   *      --   Second Supplemental Indenture dated as of June 15, 1998
               between Consumers Energy Company and The Chase Manhattan
               Bank, as Trustee. (Designated in Consumers Energy Company's
               Bank, as Trustee. (Designated in Consumers Energy Company's
               Registration Statement on Form S-4 dated July 13, 1998, File
               No. 333-58943, as Exhibit (4)(b).)
   *      --   Third Supplemental Indenture dated as of October 29, 1998
               between Consumers Energy Company and The Chase Manhattan
               Bank, as Trustee. (Designated in Consumers' Form 10-Q for
               the quarter ended September 30, 1998, File No. 1-5611, as
               Exhibit (4)(a).)
</Table>

                                       II-3
<PAGE>

<Table>
<Caption>
EXHIBIT
  NO.                                  DESCRIPTION
- --------                               -----------
<C>       <S>  <C>
 *(4)(e)  --   Indenture dated as of September 1, 1945, between Consumers
               Energy Company and Chemical Bank (successor to Manufacturers
               Hanover Trust Company, as Trustee, including therein
               indentures supplemental thereto through the Forty-third
               supplemental Indenture dated as of May 1, 1979. (Designated
               In Consumers Energy Company's Registration Statement No.
               2-65973, as Exhibit (b)(1)-(4).)
          --   Indentures Supplemental thereto:
   *      --   Sixty-Eighth Supplement Indenture dated as June 15, 1993
               between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Consumers File No. 33-41126, as
               Exhibit (4)(a).)
   *      --   Sixty-Ninth Supplement Indenture dated as of September 15,
               1993 between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Consumers Form 8-K dated September
               21, 1993, File No. 1-5611, as Exhibit (4).)
   *      --   Seventieth Supplemental Indenture dated as of February 1,
               1998 between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form 10-K for year ended December
               31, 1997, File No. 1-5611, as Exhibit (4).)
   *      --   Seventy First Supplement Indenture dated as of March 1, 1998
               between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form 10-K for year ended December
               31, 1997, File No. 1-5611, as Exhibit (4).)
   *      --   Seventy-Second Supplement Indenture dated as of May 1, 1998
               between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form 10-Q for quarter ended March
               31, 1998, File No. 1-5611, as Exhibit (4)(b).)
   *      --   Seventy-Third Supplement Indenture dated as of June 15, 1998
               between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form S-4 dated July 13, 1998, File
               No. 333-58943, as Exhibit (4)(d).)
   *      --   Seventy-Fourth Supplement Indenture dated as of October 29,
               1998 between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form 10-Q for quarter ended
               September 30, 1998, File No. 1-5611, as Exhibit (4)(b).)
   *      --   Seventy-Fifth Supplement Indenture dated as of October 1,
               1999 between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form 10-K for year ended December
               31, 1999, File No. 1-5611, as Exhibit (4)(b).)
   *      --   Seventy-Seventh Supplement Indenture dated as of October 1,
               1999 between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form 10-K for year ended December
               31, 1999, File No. 1-5611, as Exhibit (4)(d).)
   *      --   Seventy-Eighth Supplement Indenture dated as of March 15,
               2000 between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form 10-K for year ended December
               31, 2000, File No. 1-5611, as Exhibit (4)(b).)
   *      --   Seventy-Ninth Supplement Indenture date as of September 26,
               2001 between Consumers Energy Company and The Chase
               Manhattan Bank, as Trustee. (Designated in Form 10-Q for the
               quarter ended September 30, 2001, File No. 1-5611, as
               Exhibit (4)(b).)
</Table>

                                       II-4
<PAGE>

<Table>
<Caption>
EXHIBIT
  NO.                                  DESCRIPTION
- --------                               -----------
<C>       <S>  <C>
 *(4)(f)  --   Instruments defining the rights of security holders,
               including indentures. Consumers Energy Company hereby agrees
               to furnish to the SEC upon request a copy of any Instrument
               covering securities the amount of which does not exceed 10%
               of the total assets of Consumers Energy Company and its
               subsidiaries on a consolidated basis. (Designated in
               Consumers' Registration Statement on Form S-3, dated October
               20, 1999, File No. 333-89363, as Exhibit (4)(f).)
  (4)(g)  --   Certificate of Trust of Consumers Energy Company Financing V
  (4)(h)  --   Certificate of Trust of Consumers Energy Company Financing
               VI
 *(4)(i)  --   Form of Amended and Restated Declaration of Trust
               (Designated in Consumers' Registration Statement on Form
               S-3, dated October 20, 1999, File No. 333-89363, as Exhibit
               (4)(i).)
 *(4)(j)  --   Form of Supplemental Indenture to be used with the
               Subordinated Debentures issued in connection with the
               Preferred Securities (Designated in Consumers' Registration
               Statement on Form S-3, dated October 20, 1999, File No.
               333-89363, as Exhibit (4)(j).)
 *(4)(k)  --   Form of Subordinated Debenture (included in (4)(j))
 *(4)(l)  --   Form of Trust Preferred Security (included in (4)(i))
 *(4)(m)  --   Form of Preferred Securities Guarantee Agreement (Designated
               in Consumers' Registration Statement on Form S-3, dated
               October 20, 1999, File No. 333-89363, as Exhibit (4)(m).)
 *(4)(n)  --   Form of Common Securities Guarantee Agreement (Designated in
               Consumers' Registration Statement on Form S-3, dated October
               20, 1999, File No. 333-89363, as Exhibit (4)(n).)
 *(4)(o)  --   Form of Senior Debenture (included in (4)(d)).
  (4)(p)  --   Indenture dated as of November 8, 2001 between Consumers
               Funding LLC and The Bank of New York
  (4)(q)  --   Series Supplement dated as of November 8, 2001 between
               Consumers Funding and the Bank of New York
  (5)(a)  --   Opinion of Michael D. VanHemert, Assistant General Counsel
               for CMS Energy
  (5)(b)  --   Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
               regarding the legality of the trust preferred securities of
               Consumers Energy Company Financing V
  (5)(c)  --   Opinion of regarding the Skadden, Arps, Slate, Meagher &
               Flom LLP legality of the trust preferred securities of
               Consumers Energy Company Financing VI (included in Exhibit
               (5)(b))
 (10)(a)  --   Sales agreement dated as of November 8, 2001 between
               Consumers Energy Company and Consumers Funding LLC.
 (10)(b)  --   Servicing agreement dated as of November 8, 2001 between
               Consumers Funding LLC and Consumers Energy Company
 (10)(c)  --   Intercreditor agreement dated as of November 8, 2001 among
               Canadian Imperial Bank of Commerce, Asset Securitization
               Cooperative Corporation, The Bank of New York, Consumers
               Funding LLC and Consumers Energy Company
 (12)     --   Statement regarding computation of ratios of earnings to
               fixed charges and ratios of earnings to fixed charges and
               preferred stock dividends
 (15)     --   Letter re unaudited interim financial information
 (23)(a)  --   Consent of Michael D. VanHemert, Assistant General Counsel
               for CMS Energy (included in Exhibit (5)(a) above)
</Table>

                                       II-5
<PAGE>

<Table>
<Caption>
EXHIBIT
  NO.                                  DESCRIPTION
- --------                               -----------
<C>       <S>  <C>
 (23)(b)  --   Consent of Skadden, Arps, Slate, Meagher & Flom LLP
               (included in Exhibit (5)(b) and (5)(c) above)
 (23)(c)  --   Consent of Arthur Andersen, LLP
 (24)     --   Powers of Attorney
 (25)(a)  --   Statement of Eligibility and Qualification of The Chase
               Manhattan Bank (Senior Note Trustee of Consumers Energy
               Company)
 (25)(b)  --   Statement of Eligibility and Qualification of the Bank of
               New York (Subordinated Notes Trustee of Consumers Energy
               Company)
 (25)(c)  --   Statement of Eligibility of Property Trustee of Consumers
               Energy Company Financing V
 (25)(d)  --   Statement of Eligibility of Property Trustee of Consumers
               Energy Company Financing VI
 (25)(e)  --   Statement of Eligibility of Preferred Guarantee Trustee of
               Consumers Energy Company Financing V
 (25)(f)  --   Statement of Eligibility of the Preferred Guarantee Trustee
               of Consumers Energy Financing VI
</Table>

- ---------------

 *  Previously filed

ITEM 17. UNDERTAKINGS.

     The undersigned registrants hereby undertake:

     (1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement: (i) To include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the total, represent a fundamental change in
the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the SEC
pursuant to Rule 424(b) if, in the total, the changes in volume and price
represent no more than a 20% change in the maximum total offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement; (iii) To include any material information with respect
to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement; provided, however, that (i) and (ii) do not apply if the registration
statement is on Form S-3 or Form S-8, and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the SEC by the registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.

     (2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

     (3) To remove from registration by means of post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.

     (4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this registration statement shall be deemed to be a
new

                                       II-6
<PAGE>

registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

     (5) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that as
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
be governed by the final adjudication of such issue.

     (6) That (1) for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective; and (2) for the purpose of
determining any liability under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

                                       II-7
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Form S-3
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Jackson, and State of Michigan, on the 19th day
of November, 2001.

                                          Consumers Energy Company

                                          By: /s/ ALAN M. WRIGHT
                                            ------------------------------------
                                                       Alan M. Wright
                                                 Executive Vice President,
                                                Chief Financial Officer and
                                                Chief Administrative Officer

     Pursuant to the requirements of the Securities Act of 1933, this Form S-3
Registration Statement has been signed below by the following persons in the
capacities and on the 19th day of November 2001.

<Table>
<Caption>
                   NAME                                      TITLE
                   ----                                      -----
<C>                                                          <S>
(i) Principal executive officer:

      /s/ WILLIAM T. MCCORMICK, JR.                          Chairman of the Board and Chief Executive
- ------------------------------------------                     Officer
        William T. McCormick, Jr.

(ii) Principal financial officer:

            /s/ ALAN M. WRIGHT                               Executive Vice President,
- ------------------------------------------                     Chief Financial Officer and
              Alan M. Wright                                   Chief Administrative Officer

(iii) Controller or principal accounting officer:

             /s/ DENNIS DAPRA                                Senior Vice President, Accounting and
- ------------------------------------------                     Regulatory Affairs
               Dennis DaPra

                    *                                        Director
- ------------------------------------------
        William T. McCormick, Jr.

                    *                                        Director
- ------------------------------------------
             (John M. Deutch)

                    *                                        Director
- ------------------------------------------
          (James J. Duderstadt)

                    *                                        Director
- ------------------------------------------
          (Kathleen R. Flaherty)

                    *                                        Director
- ------------------------------------------
             (Earl D. Holton)

                    *                                        Director
- ------------------------------------------
             (David W. Joos)

                    *                                        Director
- ------------------------------------------
           (William U. Parfet)
</Table>

                                       II-8
<PAGE>

<Table>
<Caption>
                   NAME                                      TITLE
                   ----                                      -----
<C>                                                          <S>
                    *                                        Director
- ------------------------------------------
            (Percy A. Pierre)

                    *                                        Director
- ------------------------------------------
             (Kenneth L. Way)

                    *                                        Director
- ------------------------------------------
            (Kenneth Whipple)

                    *                                        Director
- ------------------------------------------
            (John B. Yasinsky)

By: /s/ ALAN M. WRIGHT
- -----------------------------------------
    Alan M. Wright
    Attorney in-fact
</Table>

                                       II-9
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, Consumers
Energy Company Financing V certifies that it has reasonable grounds to believe
that it meets all the requirements for filing on Form S-3 and has duly caused
this Form S-3 Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Jackson, State of
Michigan, on the 21st day of November, 2001.

                                        CONSUMERS ENERGY COMPANY FINANCING V

                                        By: /s/ ALAN M. WRIGHT
                                           -------------------------------------
                                            Alan M. Wright, Trustee

                                        By: /s/ THOMAS A. MCNISH
                                           -------------------------------------
                                            Thomas A. McNish, Trustee

                                      II-10
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, Consumers
Energy Company Financing VI certifies that it has reasonable grounds to believe
that it meets all the requirements for filing on Form S-3 and has duly caused
this Form S-3 Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Jackson, State of
Michigan, on the 21st day of November, 2001.

                                        CONSUMERS ENERGY COMPANY FINANCING VI

                                        By: /s/ ALAN M. WRIGHT
                                           -------------------------------------
                                            Alan M. Wright, Trustee

                                        By: /s/ THOMAS A. MCNISH
                                           -------------------------------------
                                            Thomas A. McNish, Trustee

                                      II-11
<PAGE>

                                 EXHIBIT INDEX

<Table>
<Caption>
EXHIBIT
  NO.                                  DESCRIPTION
- --------                               -----------
<C>       <S>  <C>
 *(1)(a)  --   Form of Underwriting Agreement with respect to the trust
               preferred securities. (Designated in Consumers' Registration
               Statement on Form S-3, dated October 20, 1999, File No.
               333-89363, as Exhibit (1)(a).)
 *(1)(b)  --   Form of Underwriting Agreement with respect to the offered
               securities (other than the trust preferred securities).
               (Designated in Consumers Registration Statement on Form S-3,
               dated June 7, 2001, File No. 333-62500 as Exhibit (1)(b).)
  (1)(c)  --   Underwriting agreement dated as of October 31, 2001 among
               Consumers Energy Company, Consumers Funding LLC and Morgan
               Stanley & Co. Incorporated on behalf of itself and as the
               representative of the several underwriters named therein.
 *(4)(a)  --   Restated Articles of Incorporation of Consumers. (Designated
               in Consumers' Form 10-K for the year ended December 31,
               2000, File No. 1-5611, as Exhibit (3)(c).)
 *(4)(b)  --   By-Laws of Consumers (Designated in Consumers' Form 10-K,
               for the year ended December 31, 1999, File No. 1-5611, as
               Exhibit (3)(d).)
 *(4)(c)  --   Indenture dated as of January 1, 1996 between Consumers
               Energy Company and The Bank of New York, as Trustee.
               (Designated in Consumers' Form 10-K for the year ended
               December 31, 1995, File No. 1-5611, as Exhibit (4)(b).)
          --   Indentures Supplemental thereto:
   *      --   First Supplemental Indenture dated as of January 18, 1996
               between Consumers Energy Company and The Bank of New York,
               as Trustee. (Designated in Consumers' Form 10-K for the year
               ended December 31, 1995, File No. 1-5611, as Exhibit
               (4)(b).)
   *      --   Second Supplemental Indenture dated as of September 4, 1997
               between Consumers Energy Company and The Bank of New York,
               as Trustee. (Designated in Consumers' Form 10-Q for the
               quarter ended September 30, 1997, File No. 1-5611, as
               Exhibit (4)(a).)
   *      --   Third Supplemental Indenture dated as of November 4, 1999
               between Consumers Energy Company and The Bank of New York,
               as Trustee. (Designated in Consumers' Form 10-Q for the
               quarter ended September 30, 1999, File No. 1-5611, as
               Exhibit (4)(a).)
   *      --   Fourth Supplemental Indenture dated as of May 31, 2001
               between Consumers Energy Company and The Bank of New York,
               as Trustee. (Designated in Form 10-Q for the quarter ended
               September 30, 2001, File No. 1-5611, as Exhibit (4)(a).)
 *(4)(d)  --   Indenture dated as of February 1, 1998 between Consumers
               Energy Company and The Chase Manhattan Bank, as Trustee.
               (Designated in Consumers' Form 10-K for the year ended
               December 31, 1997, File No. 1-5611, as Exhibit (4)(c).)
          --   Indentures Supplemental thereto:
   *      --   First Supplemental Indenture dated as of May 1, 1998 between
               Consumers Energy Company and The Chase Manhattan Bank, as
               Trustee. (Designated in Consumers' Form 10-Q for the quarter
               ended March 31, 1998, File No. 1-5611, as Exhibit (4)(a).)
   *      --   Second Supplemental Indenture dated as of June 15, 1998
               between Consumers Energy Company and The Chase Manhattan
               Bank, as Trustee. (Designated in Consumers Energy Company's
               Bank, as Trustee. (Designated in Consumers Energy Company's
               Registration Statement on Form S-4 dated July 13, 1998, File
               No. 333-58943, as Exhibit (4)(b).)
   *      --   Third Supplemental Indenture dated as of October 29, 1998
               between Consumers Energy Company and The Chase Manhattan
               Bank, as Trustee. (Designated in Consumers' Form 10-Q for
               the quarter ended September 30, 1998, File No. 1-5611, as
               Exhibit (4)(a).)
</Table>
<PAGE>

<Table>
<Caption>
EXHIBIT
  NO.                                  DESCRIPTION
- --------                               -----------
<C>       <S>  <C>
 *(4)(e)  --   Indenture dated as of September 1, 1945, between Consumers
               Energy Company and Chemical Bank (successor to Manufacturers
               Hanover Trust Company, as Trustee, including therein
               indentures supplemental thereto through the Forty-third
               supplemental Indenture dated as of May 1, 1979. (Designated
               In Consumers Energy Company's Registration Statement No.
               2-65973, as Exhibit (b)(1)-(4).)
          --   Indentures Supplemental thereto:
   *      --   Sixty-Eighth Supplement Indenture dated as June 15, 1993
               between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Consumers File No. 33-41126, as
               Exhibit (4)(a).)
   *      --   Sixty-Ninth Supplement Indenture dated as of September 15,
               1993 between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Consumers Form 8-K dated September
               21, 1993, File No. 1-5611, as Exhibit (4).)
   *      --   Seventieth Supplemental Indenture dated as of February 1,
               1998 between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form 10-K for year ended December
               31, 1997, File No. 1-5611, as Exhibit (4).)
   *      --   Seventy First Supplement Indenture dated as of March 1, 1998
               between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form 10-K for year ended December
               31, 1997, File No. 1-5611, as Exhibit (4).)
   *      --   Seventy-Second Supplement Indenture dated as of May 1, 1998
               between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form 10-Q for quarter ended March
               31, 1998, File No. 1-5611, as Exhibit (4)(b).)
   *      --   Seventy-Third Supplement Indenture dated as of June 15, 1998
               between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form S-4 dated July 13, 1998, File
               No. 333-58943, as Exhibit (4)(d).)
   *      --   Seventy-Fourth Supplement Indenture dated as of October 29,
               1998 between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form 10-Q for quarter ended
               September 30, 1998, File No. 1-5611, as Exhibit (4)(b).)
   *      --   Seventy-Fifth Supplement Indenture dated as of October 1,
               1999 between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form 10-K for year ended December
               31, 1999, File No. 1-5611, as Exhibit (4)(b).)
   *      --   Seventy-Seventh Supplement Indenture dated as of October 1,
               1999 between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form 10-K for year ended December
               31, 1999, File No. 1-5611, as Exhibit (4)(d).)
   *      --   Seventy-Eighth Supplement Indenture dated as of March 15,
               2000 between Consumers Energy Company and Chemical Bank
               (successor to Manufacturers Hanover Trust Company, as
               Trustee. (Designated in Form 10-K for year ended December
               31, 2000, File No. 1-5611, as Exhibit (4)(b).)
   *      --   Seventy-Ninth Supplement Indenture date as of September 26,
               2001 between Consumers Energy Company and The Chase
               Manhattan Bank, as Trustee. (Designated in Form 10-Q for the
               quarter ended September 30, 2001, File No. 1-5611, as
               Exhibit (4)(b).)
</Table>
<PAGE>

<Table>
<Caption>
EXHIBIT
  NO.                                  DESCRIPTION
- --------                               -----------
<C>       <S>  <C>
 *(4)(f)  --   Instruments defining the rights of security holders,
               including indentures. Consumers Energy Company hereby agrees
               to furnish to the SEC upon request a copy of any Instrument
               covering securities the amount of which does not exceed 10%
               of the total assets of Consumers Energy Company and its
               subsidiaries on a consolidated basis. (Designated in
               Consumers' Registration Statement on Form S-3, dated October
               20, 1999, File No. 333-89363, as Exhibit (4)(f).)
  (4)(g)  --   Certificate of Trust of Consumers Energy Company Financing V
  (4)(h)  --   Certificate of Trust of Consumers Energy Company Financing
               VI
 *(4)(i)  --   Form of Amended and Restated Declaration of Trust
               (Designated in Consumers' Registration Statement on Form
               S-3, dated October 20, 1999, File No. 333-89363, as Exhibit
               (4)(i).)
 *(4)(j)  --   Form of Supplemental Indenture to be used with the
               Subordinated Debentures issued in connection with the
               Preferred Securities (Designated in Consumers' Registration
               Statement on Form S-3, dated October 20, 1999, File No.
               333-89363, as Exhibit (4)(j).)
 *(4)(k)  --   Form of Subordinated Debenture (included in (4)(j))
 *(4)(l)  --   Form of Trust Preferred Security (included in (4)(i))
 *(4)(m)  --   Form of Preferred Securities Guarantee Agreement (Designated
               in Consumers' Registration Statement on Form S-3, dated
               October 20, 1999, File No. 333-89363, as Exhibit (4)(m).)
 *(4)(n)  --   Form of Common Securities Guarantee Agreement (Designated in
               Consumers' Registration Statement on Form S-3, dated October
               20, 1999, File No. 333-89363, as Exhibit (4)(n).)
 *(4)(o)  --   Form of Senior Debenture (included in (4)(d)).
  (4)(p)  --   Indenture dated as of November 8, 2001 between Consumers
               Funding LLC and The Bank of New York
  (4)(q)  --   Series Supplement dated as of November 8, 2001 between
               Consumers Funding and the Bank of New York
  (5)(a)  --   Opinion of Michael D. VanHemert, Assistant General Counsel
               for CMS Energy
  (5)(b)  --   Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
               regarding the legality of the trust preferred securities of
               Consumers Energy Company Financing V
  (5)(c)  --   Opinion of regarding the Skadden, Arps, Slate, Meagher &
               Flom LLP legality of the trust preferred securities of
               Consumers Energy Company Financing VI (included in Exhibit
               (5)(b))
 (10)(a)  --   Sales agreement dated as of November 8, 2001 between
               Consumers Energy Company and Consumers Funding LLC.
 (10)(b)  --   Servicing agreement dated as of November 8, 2001 between
               Consumers Funding LLC and Consumers Energy Company
 (10)(c)  --   Intercreditor agreement dated as of November 8, 2001 among
               Canadian Imperial Bank of Commerce, Asset Securitization
               Cooperative Corporation, The Bank of New York, Consumers
               Funding LLC and Consumers Energy Company
 (12)     --   Statement regarding computation of ratios of earnings to
               fixed charges and ratios of earnings to fixed charges and
               preferred stock dividends
 (15)     --   Letter re unaudited interim financial information
 (23)(a)  --   Consent of Michael D. VanHemert, Assistant General Counsel
               for CMS Energy (included in Exhibit (5)(a) above)
</Table>
<PAGE>

<Table>
<Caption>
EXHIBIT
  NO.                                  DESCRIPTION
- --------                               -----------
<C>       <S>  <C>
 (23)(b)  --   Consent of Skadden, Arps, Slate, Meagher & Flom LLP
               (included in Exhibit (5)(b) and (5)(c) above)
 (23)(c)  --   Consent of Arthur Andersen, LLP
 (24)     --   Powers of Attorney
 (25)(a)  --   Statement of Eligibility and Qualification of The Chase
               Manhattan Bank (Senior Note Trustee of Consumers Energy
               Company)
 (25)(b)  --   Statement of Eligibility and Qualification of the Bank of
               New York (Subordinated Notes Trustee of Consumers Energy
               Company)
 (25)(c)  --   Statement of Eligibility of Property Trustee of Consumers
               Energy Company Financing V
 (25)(d)  --   Statement of Eligibility of Property Trustee of Consumers
               Energy Company Financing VI
 (25)(e)  --   Statement of Eligibility of Preferred Guarantee Trustee of
               Consumers Energy Company Financing V
 (25)(f)  --   Statement of Eligibility of the Preferred Guarantee Trustee
               of Consumers Energy Financing VI
</Table>

- ---------------

 *  Previously filed

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.C
<SEQUENCE>3
<FILENAME>k65350ex1-c.txt
<DESCRIPTION>UNDERWRITING AGREEMENT DATED OCTOBER 31, 2001
<TEXT>
<PAGE>

                                EXHIBIT 1(c)

                           UNDERWRITING AGREEMENT






                                $468,592,000


                           Consumers Funding LLC
                     Securitization Bonds Series 2001-1

                          Consumers Energy Company


                           Underwriting Agreement



<PAGE>

                                                        October 31, 2001



To the Representative named
in Schedule I hereto of the
Underwriters named in
Schedule II hereto

Dear Sirs:

         Consumers Funding LLC, a Delaware limited liability company (the
"Issuer"), proposes to sell to the underwriters named in Schedule II hereto
(the "Underwriters"), for whom you (the "Representative") are acting as
representative, the principal amount of the securities identified in
Schedule I hereto (the "Securitization Bonds"). If the firm or firms listed
in Schedule II hereto include only the firm listed in Schedule I hereto,
then the terms "Underwriters" and "Representative", as used herein, shall
each be deemed to refer to such firm.

         The Issuer is a wholly-owned subsidiary of Consumers Energy
Company, an operating electric and gas public utility incorporated under
the laws of the State of Michigan (the "Company").

         The Securitization Bonds will be issued pursuant to a base
indenture dated on or about November 8, 2001 as supplemented by the Series
2001-1 Supplemental Indenture thereto (as so supplemented, the
"Indenture"), between the Issuer and the Bank of New York, as trustee (the
"Bond Trustee"). The Securitization Bonds will be secured primarily by
Securitization Property sold to the Issuer by the Company. The Company's
sale of Securitization Property to the Issuer will occur pursuant to a Sale
Agreement between the Company and the Issuer, dated on or about November 8,
2001 (the "Sale Agreement"). The Securitization Property will be serviced
pursuant to a Servicing Agreement, dated on or about November 8, 2001,
between the Company, as servicer, and the Issuer, as owner of the
Securitization Property (as amended and supplemented from time to time, the
"Servicing Agreement"). Pursuant to an Administration Agreement between the
Company and the Issuer, dated on or about November 8, 2001 (the
"Administration Agreement"), the Company will provide certain
administrative services for the benefit of the Issuer. In addition, the
Company, the Issuer, the Bond Trustee, Canadian Imperial Bank of Commerce
and Asset Securitization Cooperative Corporation will enter into an
Intercreditor Agreement dated on or about November 8, 2001 (the
"Intercreditor Agreement").


<PAGE>

         Capitalized terms used and not otherwise defined herein shall have
the meanings given to them in the Indenture.

         The Issuer has prepared and filed with the Securities and Exchange
Commission (the "Commission"), in accordance with the provisions of the
Securities Act of 1933, as amended (the "Act"), a registration statement on
Form S-3, as amended (Registration No. 333-47938), including a prospectus
relating to the Securitization Bonds and such registration statement has
become effective under the Act. The registration statement at the time such
registration statement became effective and as it may have been thereafter
amended to the date of this Agreement (including the documents then
incorporated by reference therein) is hereinafter referred to as the
"Registration Statement." The prospectus forming a part of the Registration
Statement at the time the Registration Statement became effective
(including the documents then incorporated by reference therein) is
hereinafter referred to as the "Basic Prospectus," provided that in the
event that the Basic Prospectus shall have been amended, revised or
supplemented prior to the date of this Agreement, or if the Issuer shall
have supplemented the Basic Prospectus by filing any documents pursuant to
Section 13, 14 or 15 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), after the time the Registration Statement became
effective and prior to the date of this Agreement, which documents are
deemed to be incorporated in the Basic Prospectus, the term "Basic
Prospectus" shall also mean such prospectus as so amended, revised or
supplemented. The Basic Prospectus, as it shall be revised or supplemented
to reflect the final terms of the offering and sale of the Securitization
Bonds by a prospectus supplement (the "Prospectus Supplement") relating to
the Securitization Bonds, and in the form to be filed with, or transmitted
for filing to, the Commission pursuant to Rule 424(b) under the Act, is
hereinafter referred to as the "Prospectus." Any preliminary prospectus
supplement to the Basic Prospectus that describes the Securitization Bonds
and the offering thereof and is used prior to filing of the Prospectus is
hereinafter referred to as the "Preliminary Prospectus." Any reference
herein to the terms "amend," "amendment" or "supplement" with respect to
the Registration Statement, the Preliminary Prospectus or the Prospectus
shall be deemed to include only amendments or supplements to the
Registration Statement, the Preliminary Prospectus or Prospectus, as the
case may be, and documents incorporated by reference therein after the date
of this Agreement and prior to the termination of the offering of the
Securitization Bonds by the Underwriters.

         1. Purchase and Sale: Upon the basis of the representations and
warranties and on the terms and subject to the conditions herein set forth,
the Issuer agrees to sell to the respective Underwriters, severally and not
jointly, and the respective Underwriters, severally and not jointly, agree
to purchase from the Issuer, at the purchase price specified in Schedule
III hereto, the respective principal amounts of Securitization Bonds set
forth opposite their names in Schedule II hereto.

         The Company and the Issuer are advised by the Representative that
the Underwriters propose to make a public offering of their respective
portions of the Securitization Bonds as soon as practicable, in their
judgment, after this Agreement has become effective.


<PAGE>

         2. Payment and Delivery: Payment for the Securitization Bonds
shall be made to the Issuer or its order in Federal or other immediately
available funds in New York City (or such other place or places of payment
as shall be agreed upon by the Issuer and the Representative in writing),
upon the delivery of the Securitization Bonds at the offices of Skadden,
Arps, Slate, Meagher and Flom LLP ("Skadden, Arps"), at Four Times Square,
New York, New York 10036 (or such other place or places of delivery as
shall be agreed upon by the Issuer and the Representative) to the
Representative for the respective accounts of the Underwriters against
receipt therefor signed by the Representative on behalf of itself and as
agent for the other Underwriters. Such payment and delivery shall be made
at 10:00 A.M., New York time on November 8, 2001 (or on such later business
day as shall be agreed upon by the Company, the Issuer and the
Representative in writing), unless postponed in accordance with the
provisions of Section 11 hereof. The day and time at which payment and
delivery for the Securitization Bonds are to be made is herein called the
"Time of Purchase."

         The Securitization Bonds to be so delivered shall be initially
represented by Securitization Bonds registered in the name of Cede & Co.,
as nominee of The Depository Trust Company ("DTC"). The interests of
beneficial owners of the Securitization Bonds will be represented by book
entries on the records of DTC and participating members thereof. Definitive
Securitization Bonds will be available only under limited circumstances.

         The Company and the Issuer agree to make the Securitization Bonds
available for inspection by the Underwriters at the offices of Skadden,
Arps, at least 24 hours prior to the Time of Purchase, in definitive, fully
registered form, as described pursuant to the preceding paragraph.

         3. Conditions of Underwriters' Obligations: The several
obligations of the Underwriters hereunder are subject to the accuracy of
the warranties and representations on the part of the Issuer and the
Company contained herein as of the date of execution of this Agreement and
as of the Time of Purchase, on the part of the Company contained in Article
III of the Sale Agreement and Section 5.01 of the Servicing Agreement and
to the following other conditions:

               (a) If filing of the Prospectus, or any supplement thereto,
         is required pursuant to Rule 424(b), the Prospectus, and any such
         supplement, shall have been filed in the manner and within the
         time period required by Rule 424(b); and no stop order suspending
         the effectiveness of the Registration Statement shall have been
         issued and no proceedings for that purpose shall have been
         instituted or threatened.


<PAGE>

               (b) The Representative shall have received an opinion of
         David A. Mikelonis, Senior Vice President and General Counsel of
         the Company, Skadden, Arps, Slate Meagher & Flom LLP, outside
         counsel for the Company (with respect to the opinion in clause
         (iii) below), Miller, Canfield, Paddock and Stone, P.L.C., special
         Michigan counsel for the Company (with respect to the opinion in
         clause (iii) below), or such other counsel for the Company as may
         be acceptable to the Representative, dated the Time of Purchase,
         in form and substance reasonably satisfactory to the
         Representative, to the effect that:

                           (i) The Company has been duly incorporated and
               is validly existing as a corporation in good standing under
               the laws of the State of Michigan, and there is no other
               jurisdiction where the nature of the Company's business
               requires qualification in order to protect the validity and
               enforceability of this Agreement, the Servicing Agreement,
               the Sale Agreement, the Bill of Sale, the Administration
               Agreement and the Intercreditor Agreement (collectively, the
               "Company Documents") or where the failure to be so qualified
               could materially and adversely affect the business,
               properties or assets of the Company. The Company has the
               power and authority to execute, deliver and perform its
               obligations under the Company Documents and to own its
               properties and conduct its business as described in the
               Registration Statement and the Prospectus;

                           (ii) The execution, delivery and performance by
               the Company of the Company Documents and the consummation by
               the Company of the transactions contemplated thereby have
               been duly authorized by all requisite corporate action on
               the part of the Company and each of the Company Documents
               has been duly executed and delivered by the Company;

                           (iii) The Company Documents constitute valid and
               legally binding obligations of the Company enforceable
               according to their terms;

                           (iv) The Company holds all franchises,
               certificates of public convenience, licenses and permits
               necessary to carry on the utility business in which it is
               engaged, the absence of which would have a material adverse
               effect on the financial condition of the Company or on the
               validity of the Company Documents. All consents, approvals,
               authorizations of, or filings or registrations with, any
               governmental body, authority or agency applicable to the
               Company and required as a condition to the validity of the
               Company Documents or in connection with the execution,
               delivery and performance by the Company of the Company
               Documents have been obtained or made;
<PAGE>

                           (v) The execution, delivery and performance by
               the Company (or, in the case of clause (d) below, the
               Issuer) of the Company Documents, each in accordance with
               its terms, do not (a) conflict with the Restated Articles of
               Incorporation or By-laws of the Company, (b) conflict with
               or breach any of the terms or provisions of, or constitute
               (with or without notice or lapse of time) a default under
               any indenture, material agreement or instrument to which the
               Company is a party or by which the Company or any of its
               property is bound, (c) result in the creation or imposition
               of any security interest or lien on any properties of the
               Company pursuant to the terms of any such agreement or
               instrument, except as provided in the Sale Agreement, (d)
               violate any law or any consent, order, rule, regulation or
               decree of any court or federal or state regulatory body,
               administrative agency or other governmental authority having
               jurisdiction over the Company or the Issuer or any of their
               respective properties, or (e) violate any law, rule or
               regulation applicable to the Company;

                           (vi) There is no pending and, to the best of
               such counsel's knowledge, no threatened action, suit or
               proceeding before any court or governmental agency,
               authority or body or any arbitrator involving the Company or
               any of its subsidiaries, or involving or relating to the
               Financing Order or the collection of the Securitization
               Charge or the use and enjoyment of the Securitization
               Property under the Customer Choice and Electric Reliability
               Act (2000 PA 141 and 142) (the "Customer Choice Act") of a
               character required to be disclosed in the Registration
               Statement or the Prospectus that is not adequately disclosed
               in the Prospectus, and there is no franchise, contract or
               other document of a character required to be disclosed in
               the Registration Statement or the Prospectus, or to be filed
               as an exhibit, that is not disclosed or filed as required;

                           (vii) The Securitization Property is not subject
               to the lien of the Trust Indenture of Consumers Energy
               Company with The Chase Manhattan Bank as Trustee, dated as
               of September 1, 1945, as amended and supplemented (the
               "Trust Indenture"), and the grant of a security interest in
               the Securitization Property pursuant to Section 2.01(e) of
               the Sale Agreement will not breach any covenant in the Trust
               Indenture. The transfer of the Securitization Property and
               the other Collateral by the Company to the Issuer on the
               date of issuance of the Securitization Bonds is free and
               clear of the lien created by any indenture, agreement or
               other instrument to which the Company is a party or by which
               the Company is bound;

                           (viii) The statements included in the Prospectus
               under the caption "Consumers Energy Company," to the extent
               that they constitute matters of Michigan law or legal
               conclusions with respect thereto, provide a fair and
               accurate summary of such law and conclusions; and


<PAGE>

                           (ix) Nothing has come to such counsel's
               attention to lead such counsel to believe that the
               Registration Statement at the effective date thereof
               contained an untrue statement of a material fact or omitted
               to state a material fact required to be stated therein or
               necessary to make the statements therein, in the light of
               the circumstances under which they were made, not
               misleading, or that the Final Prospectus contained as of its
               date or contains as of the date hereof an untrue statement
               of a material fact or omitted or omits, as the case may be,
               to state a material fact necessary to make the statements
               therein, in the light of the circumstances under which they
               were made, not misleading.

               (c) The Representative shall have received opinions of
         counsel for the Issuer, portions of which may be delivered by
         Skadden, Arps, Slate Meagher & Flom LLP, outside counsel for the
         Issuer, portions of which may be delivered by Miller, Canfield,
         Paddock and Stone, P.L.C., special Michigan counsel for the
         Issuer, and portions of which may be delivered by Loomis, Ewert,
         Parsley, David & Gotting, PC, special regulatory counsel for the
         Issuer, each dated the Time of Purchase, in form and substance
         reasonably satisfactory to the Representative, to the effect that:

                           (i) The Issuer has been duly formed and is
               validly existing and in good standing as a limited liability
               company under the laws of the State of Delaware;

                           (ii) The Issuer is duly qualified to do business
               and is in good standing under the laws of the State of
               Michigan;

                           (iii) The Issuer has the limited liability
               company power and authority to execute, deliver and perform
               its obligations under the Sale Agreement, the Bill of Sale,
               the Servicing Agreement, the Administration Agreement, the
               Intercreditor Agreement, the Indenture, the Underwriting
               Agreement and the Securitization Bonds and to own its
               properties and conduct its business as described in the
               Registration Statement and the Prospectus;

                           (iv) The execution and delivery of each of the
               Sale Agreement, the Bill of Sale, the Servicing Agreement,
               the Administration Agreement, the Intercreditor Agreement,
               the Indenture, the Underwriting Agreement and the
               Securitization Bonds and the consummation by the Issuer of
               the transactions contemplated thereby have been duly
               authorized by all requisite limited liability company action
               on the part of the Issuer and each of such documents has
               been duly executed and delivered by the Issuer;


<PAGE>

                           (v) The issue and sale of the Securitization
               Bonds by the Issuer, the execution and delivery by the
               Issuer of each of the Sale Agreement, the Bill of Sale, the
               Servicing Agreement, the Administration Agreement, the
               Intercreditor Agreement, the Indenture and the Underwriting
               Agreement and the performance by the Issuer of its
               obligations under each of the foregoing, each in accordance
               with its terms, do not (a) conflict with, result in any
               breach of any of the terms or provisions of, or constitute
               (with or without notice or lapse of time) a default under
               the Issuer Certificate of Formation or the Issuer LLC
               Agreement, (b) conflict with or breach any of the material
               terms or provisions of, or constitute (with or without
               notice or lapse of time) a default under any indenture,
               material agreement or instrument to which the Issuer is a
               party or by which the Issuer is bound, (c) result in the
               creation or imposition of any security interest or lien on
               any properties of the Issuer (other than as contemplated by
               the Basic Documents), (d) violate any consent, order or
               decree of any court or federal or state regulatory body,
               administrative agency or other governmental authority having
               jurisdiction over the Issuer or any of its properties, or
               (e) violate any applicable law;

                           (vi) No consent, approval, license,
               authorization or validation of, giving of notice to, or
               filing, recording or registration with, any court or
               governmental authority pursuant to applicable law which has
               not been obtained or taken and is not in full force and
               effect, is required under applicable law to authorize, or is
               required under applicable law in connection with, the
               execution, delivery or performance by the Issuer of any of
               the Sale Agreement, the Bill of Sale, the Servicing
               Agreement, the Administration Agreement, the Intercreditor
               Agreement, the Indenture, the Underwriting Agreement or the
               Securitization Bonds, or the performance by the Issuer of
               the transactions contemplated by such documents;

                           (vii) Each of the Sale Agreement, the Bill of
               Sale, the Servicing Agreement, the Administration Agreement,
               the Intercreditor Agreement, the Indenture and the
               Underwriting Agreement constitutes the valid and binding
               obligation of the Issuer, enforceable against the Issuer in
               accordance with its terms;

                           (viii) When authenticated in accordance with the
               provisions of the Indenture and delivered to and paid for by
               the Underwriters in accordance with the terms of this
               Agreement, the Securitization Bonds will constitute the
               valid and binding obligations of the Issuer enforceable
               against the Issuer in accordance with their respective terms
               and will be entitled to the benefits of the Indenture;

                           (ix) Neither the execution, delivery or
               performance by the Issuer of the Sale Agreement, the Bill of
               Sale, the Servicing Agreement, the Administration Agreement,
               the Intercreditor Agreement, the Indenture, the Underwriting
               Agreement or the Securitization Bonds nor the compliance by
               the Issuer with the terms and provisions thereof nor the
               issuance and sale by the Issuer of the Securitization Bonds,
               will contravene any provisions of applicable laws;
<PAGE>

                           (x) The Indenture has been duly qualified under
               the Trust Indenture Act of 1939, as amended (the "Trust
               Indenture Act"), and neither the Sale Agreement nor the
               Servicing Agreement is required to be registered under the
               Trust Indenture Act;

                           (xi) The Securitization Bonds have been duly
               authorized and executed by the Issuer;

                           (xii) The Registration Statement has become
               effective under the Act; any required filing of the
               Prospectus pursuant to Rule 424(b) under the Act has been
               made in the manner and within the time period required by
               Rule 424(b); to the best of the knowledge of such counsel
               after due inquiry with the Commission, no stop order
               suspending the effectiveness of the Registration Statement
               has been issued and no proceedings for that purpose have
               been instituted or threatened; and the Registration
               Statement, the Preliminary Prospectus and the Prospectus
               (other than the financial statements and other financial and
               statistical information contained therein, as to which such
               counsel need express no opinion) comply as to form in all
               material respects with the applicable requirements of the
               Act and the rules thereunder, and any amendments thereto
               under the Exchange Act comply as to form in all material
               respects with the applicable requirements of the Exchange
               Act and the rules thereunder;

                           (xiii) The Issuer is not, and after giving
               effect to the offering and sale of the Securitization Bonds
               and the application of the proceeds thereof as described in
               the Prospectus will not be required to be, registered as an
               "investment company" as such term is defined in the
               Investment Company Act of 1940, as amended;

                           (xiv) The Issuer will not be subject to any
               other taxes currently imposed by the State of Michigan or
               any political subdivision thereof which would result from
               the issuance of the Securitization Bonds, the Issuer's
               purchase of the Securitization Property from the Company or
               from its ownership of the Securitization Property;

                           (xv) The Securitization Bonds, the Indenture,
               the Servicing Agreement and, the Sale Agreement, the Issuer
               LLC Agreement and the Intercreditor Agreement conform in all
               material respects to the descriptions thereof (other than,
               with respect to the Securitization Bonds, the statements
               under the subheading "The Securitization Bonds--
               Securitization Bonds Will Be Issued in Book-Entry Form")
               contained in the Prospectus;


<PAGE>

                           (xvi) The statements set forth in (a) the
               Prospectus under the captions (i) "The Securitization Bonds"
               (other than the statements under the subheading
               "Securitization Bonds Will Be Issued in Book-Entry Form")
               and "Payments of Interest and Principal" (other than the
               statements under the subheadings "Material Income Tax
               Considerations" and "ERISA Considerations"), insofar as they
               purport to summarize certain provisions of the
               Securitization Bonds and the Indenture, (ii) "The Sale
               Agreement", insofar as they purport to summarize certain
               provisions of the Sale Agreement, (iii) "The Servicing
               Agreement", insofar as they purport to summarize certain
               provisions of the Servicing Agreement, (iv) "The Indenture",
               insofar as they purport to summarize certain provisions of
               the Indenture, (v) "The Intercreditor Agreement", insofar as
               they purport to summarize certain provisions of the
               Intercreditor Agreement, and (vi) "Consumers Funding LLC",
               insofar as they purport to summarize certain provisions of
               the Issuer LLC Agreement, in each case constitute fair
               summaries of such provisions; (b) the Prospectus Supplement
               under the captions (i) "The Series 2001-1 Securitization
               Bonds" insofar as they purport to summarize certain
               provisions of the Securitization Bonds and (ii) "Credit
               Enhancement - Collection Account and Subaccounts" insofar as
               they purport to summarize certain provisions of the
               Indenture, constitute fair summaries of such provisions, and
               (c) the Prospectus under the caption "ERISA Considerations",
               insofar as such statements purport to summarize certain
               provisions of the laws referred to therein, fairly summarize
               such provisions in all material respects;

                           (xvii) The statements in the Prospectus under
               the heading "Material Income Tax Consequences for the
               Securitization Bonds" subject to the qualifications set
               forth therein, accurately describe the material federal
               income tax consequences to holders of the Securitization
               Bonds that are not U.S. persons (within the meaning of the
               Internal Revenue Code), under existing law and the
               assumptions stated therein;

                           (xviii) Such counsel adopts and confirms its
               opinion as set forth in the Prospectus Supplement under the
               caption "Introduction - Tax Status" and in the Prospectus
               under the captions "Payments of Interest and Principal -
               Material Income Tax Consequences" and "Material Income Tax
               Consequences for the Securitization Bonds";


<PAGE>

                           (xix) The statements in the Prospectus
               Supplement under the captions "Introduction - Transaction
               Overview", "The Series 2001-1 Securitization Bonds - The
               Collateral" and "Credit Enhancement" and the statements in
               the Prospectus under the captions "Risk Factors", "Judicial,
               Legislative or Regulatory Action That May Adversely Affect
               Your Investment", "Servicing Risks", "The Risks Associated
               With Potential Bankruptcy or Creditors' Rights Proceedings",
               "Other Risks Associated With An Investment In The
               Securitization Bonds", "Summary of Terms - Transaction
               Overview", "The Collateral", "The Customer Choice Act", "The
               MPSC Financing Order and the Securitization Charge" and "How
               a Bankruptcy of the Seller or the Servicer May Affect Your
               Investment" that describe Michigan law or state legal
               conclusions under Michigan law, provide a fair and accurate
               summary of such laws and conclusions;

                           (xx) Such counsel adopts and confirms its
               opinions as set forth under the headings "Payments of
               Interest and Principal - Material Income Tax Consequences"
               and "Material Income Tax Consequences for the Securitization
               Bonds - Material State of Michigan Tax Consequences" in the
               Prospectus;

                           (xxi) No facts have come such counsel's
               attention that has led it to believe that the Registration
               Statement at the effective date thereof contained an untrue
               statement of a material fact or omitted to state a material
               fact required to be stated therein or necessary to make the
               statements therein not misleading, or that the Prospectus
               contained as of its date or contains as of the Closing Date
               an untrue statement of a material fact or omitted or omits,
               as the case may be, to state a material fact necessary to
               make the statements therein, in the light of the
               circumstances under which they were made, not misleading,
               except that such counsel need express no opinion or belief
               with respect to (i) the numerical, statistical and financial
               information included therein or excluded therefrom, (ii) the
               Bond Trustee's Statement of Eligibility and Qualification
               under the Trust Indenture Act on Form T-1 or (iii) the
               statements under the subheading "The Securitization
               Bonds--Securitization Bonds Will Be Issued in Book-Entry
               Form";


<PAGE>

                           (xxii) The financing order of the Michigan
               Public Service Commission dated October 24, 2000, as
               supplemented by the order dated January 4, 2001
               (collectively, the "Financing Order"), has been duly issued
               by the Michigan Public Service Commission in accordance with
               all applicable laws, rules and regulations, including the
               Customer Choice Act; the Financing Order and process by
               which it was issued complies with all applicable laws, rules
               and regulations, including the Customer Choice Act; the
               Financing Order is in full force and effect and is final and
               nonappealable; and the Customer Choice Act has been duly
               enacted by the State of Michigan in accordance with all
               applicable laws, is in full force and effect and is not the
               subject of any pending appeal or litigation;

                           (xxiii) The Financing Order is effective in
               accordance with its terms, and the Financing Order, together
               with the "Securitization Charges" (as referred to therein)
               authorized in the Financing Order, are irrevocable and not
               subject to reduction, impairment or adjustment by further
               action of the Michigan Public Service Commission for the
               period that the Securitization Bonds are outstanding, except
               as provided under Section 10k (3) of the Customer Choice
               Act;

                           (xxiv) The Financing Order authorizes the
               issuance of the Securitization Bonds, the transfer of the
               Securitization Property to the Issuer, the imposition of the
               Securitization Charges and the periodic adjustments of the
               Securitization Charges, and the sections of the Financing
               Order authorizing the foregoing are irrevocable;

                           (xxv) The provisions of the Customer Choice Act
               are constitutional under the constitutions of the United
               States and of Michigan;


<PAGE>

                           (xxvi) The Securitization Bonds are
               "securitization bonds" within the meaning of Section 10h of
               the Customer Choice Act and the Securitization Bonds are
               entitled to the protections of the Customer Choice Act. With
               respect to routine periodic adjustments to the
               Securitization Charge required by Section 10k(3) of the
               Customer Choice Act, the Michigan Public Service Commission
               has not determined the procedures to be applied in
               conducting its review of those adjustments pursuant to the
               Financing Order, including whether notice and opportunity
               for a hearing will be granted, except that, as required by
               the Financing Order, each review and determination of the
               routine periodic adjustment must be completed within 45 days
               after the Company, as servicer, or a successor servicer,
               files its request for an adjustment and must be limited in
               scope, among others specified in the Financing Order, to the
               arithmetic computation contained in the Company's, or
               successor servicer's, proposed adjustment;

                           (xxvii) The issuance and sale of the
               Securitization Bonds and the consummation of the
               transactions contemplated by the Basic Documents are
               consistent in all respects with the requirements of the
               Customer Choice Act and the Financing Order;

                           (xxviii) The Issuer is an "assignee" within the
               meaning of Section 10h of the Customer Choice Act and is not
               considered to be a public utility or person providing
               electric service solely by virtue of its performance of the
               transactions specified in the Basic Documents;

                           (xxix) The Customer Choice Act is no longer
               subject to referendum for the purpose of approving or
               rejecting it, and no petition for a voter initiative for the
               purpose of amending or repealing any portion of the Customer
               Choice Act has been filed with the Michigan Secretary of
               State;

                           (xxx) Effective on the date the Securitization
               Bonds are issued, if any provision or portion of the
               Customer Choice Act is held to be invalid, is invalidated,
               superseded, replaced or expires for any reason, that
               occurrence does not affect the validity or continuation of
               any provisions of the Customer Choice Act that are relevant
               to the issuance, administration, payment, retirement, or
               refunding of the Securitization Bonds or to any actions of
               the Company, its successors, an assignee, a collection
               agent, or a financing party, and said provisions shall
               remain in full force and effect;


<PAGE>

                           (xxxi) An attempt by the State of Michigan, the
               Michigan Public Service Commission or any other entity to
               repeal, amend or otherwise impair the Customer Choice Act or
               the rights of the holders of the Securitization Bonds,
               whether by legislation, initiative, executive order or
               Constitutional amendment, would be subject to preliminary
               injunction if a court of competent jurisdiction hearing a
               request for preliminary injunction finds that such relief is
               necessary to prevent immediate and irreparable harm that
               cannot be compensated by damages, that greater injury will
               occur from refusing the injunction than from granting it,
               that the preliminary injunction will restore the parties to
               the status quo as it existed immediately before the alleged
               wrongful conduct, that the alleged wrong is manifest and the
               injunction is reasonably suited to abate it; and that the
               right to such relief by the challenging party is clear;
               further, upon final adjudication of the challenged repeal,
               amendment or impairment, a court of competent jurisdiction
               would permanently enjoin the alleged wrongful conduct if the
               court concluded that such conduct constitutes a legal wrong
               for which no adequate remedy at law was available;

                           (xxxii) The provisions of the Sale Agreement
               together with the Bill of Sale are effective to create, in
               favor of the Issuer, a valid security interest (as such term
               is defined in the Michigan UCC) in the Seller's rights in
               the Securitization Property, which security interest if
               characterized as a transfer for security will secure a
               payment obligation incurred by the Seller in the amount paid
               by the Issuer for the Securitization Property;

                           (xxxiii) The security interest described in the
               immediately preceding paragraph in favor of the Issuer in
               the Seller's rights in the Securitization Property is
               perfected;

                           (xxxiv) The provisions of the Indenture are
               effective to create, in favor of the Bond Trustee to secure
               the payment of the Secured Obligations, a valid security
               interest in the Collateral in which a security interest may
               be created under Articles 8 and 9 of the Michigan UCC other
               than property which constitutes Collateral solely because of
               the phrase "and all other property of whatever kind" being
               included in said definition (the "Indenture Collateral")
               and, to the extent not included in the Indenture Collateral,
               in the Securitization Property;


<PAGE>

                           (xxxv) The security interest described in the
               immediately preceding paragraph in favor of the Bond Trustee
               created in the Indenture in the Indenture Collateral (other
               than the Excluded UCC Items (as defined in such opinion))
               has been perfected in all of such Indenture Collateral in
               which a security interest may be perfected by the filing of
               a financing statement within the State of Michigan;

                           (xxxvi) As provided in the Customer Choice Act,
               the lien and security interest of the Bond Trustee in the
               Issuer's rights in the Securitization Property (a) have been
               created, (b) have attached to the Securitization Property,
               (c) are valid and enforceable, (d) are a perfected lien and
               security interest in the Issuer's rights in the
               Securitization Property and all proceeds thereof, whether
               accrued or not, (e) have priority in order of filing, and
               (f) take precedence over any subsequent judicial and other
               lien creditor. In addition, pursuant to the Customer Choice
               Act, all rights and remedies with respect to a security
               interest provided by the Michigan UCC shall apply to the
               Securitization Property;

                           (xxxvii) The provisions of the Securities
               Account Control Agreement together with those of the Account
               Agreement (as defined in such opinion) are effective to
               perfect the security interest of the Bond Trustee created in
               the Indenture in the Security Entitlements (as defined in
               such opinion) and the Securities Account (as defined in such
               opinion);

                           (xxxviii) The Michigan Department of State is
               the proper filing office under the Customer Choice Act for
               the filing of financing statements in order to create a
               perfected lien and security interest in the Securitization
               Property under said Act as it pertains to the transfer
               thereof by the Seller. The Michigan Department of State is
               the proper filing office under Article 9 of the Michigan UCC
               for the filing of financing statements in order to perfect a
               security interest granted by the Issuer in the Indenture
               Collateral (but excluding therefrom property in which a
               security interest cannot be perfected by the filing of a
               financing statement under the Michigan UCC, Excluded UCC
               Items (as defined in such opinion) and proceeds of the
               Indenture Collateral if such proceeds are not subject to the
               filing requirements of Article 9 of the Michigan UCC) when
               such perfection is governed by a filing within the State of
               Michigan;


<PAGE>

                           (xxxix) The provisions of the Indenture are
               sufficient to constitute authorization by the Issuer of the
               filing of the Financing Statement for purposes of Section
               9-509 of the Delaware UCC;

                           (xl) To the extent that perfection is governed
               by the Delaware UCC, upon the later of the attachment of the
               security interest and the filing of the financing statement
               described in such opinion (the "Financing Statement") in the
               Office of the Secretary of State of the State of Delaware
               (the "Filing Office"), the security interest of the Bond
               Trustee will be perfected in the Issuer's rights in all
               Collateral to the extent such collateral is of a type
               subject to Article 9 of the Delaware UCC ("UCC Collateral")
               that may be perfected by the filing of a UCC financing
               statement in the Filing Office;

                           (xli) The UCC search report described in such
               opinion (the "Issuer Search Report") identifies no person as
               having filed in the Filing Office a financing statement
               naming "Consumers Funding LLC" as debtor and containing a
               description of collateral sufficient to include the UCC
               Collateral as of the effective date of the Issuer Search
               Report. The Issuer Search Report sets forth the proper
               debtor necessary to identify those persons who under the
               Delaware UCC have on file financing statements against the
               Issuer covering the UCC Collateral as of the effective date
               of the Issuer Search Report;

                           (xlii) For purposes of the Delaware UCC, the
               Issuer is a "registered organization";

                           (xliii) Under the Contract Clauses of the United
               States and State of Michigan Constitutions, the State of
               Michigan, including the Michigan Public Service Commission,
               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 Financing Order
               (including repeal or amendment by voter initiative as
               defined in 63 Michigan Constitution, Article 2, Section 9,
               or by amendment of the Michigan Constitution), that would
               substantially impair the value of the Securitization
               Property or substantially reduce or alter, except as allowed
               under the adjustment provisions described in Section 10k(3)
               of the Customer Choice Act, or substantially impair the
               Securitization Charges to be imposed, collected and remitted
               to the Issuer, unless such 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 such action;


<PAGE>

                           (xliv) Under the Taking Clauses of the United
               States and the State of Michigan Constitutions, the State of
               Michigan, including the Michigan Public Service Commission,
               could not repeal or amend the Customer Choice Act or the
               Financing Order (including repeal or amendment by voter
               initiative as defined in 63 Michigan Constitution, Article
               2, Section 9, or by amendment of the Michigan Constitution)
               or take any other action in contravention of the pledge set
               forth in Section 10n(2) of the Customer Choice Act without
               paying just compensation to the Securitization Bondholders,
               as determined by a court of competent jurisdiction, if doing
               so 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;
               and

                           (xlv) The pledge set forth in Section 10n(2) of
               the Customer Choice Act was validly enacted by the State of
               Michigan and is enforceable.

         In rendering any such opinion, Skadden, Arps, Slate, Meagher &
Flom LLP may rely as to matters involving the application of laws of the
State of Michigan, to the extent deemed proper and specified in such
opinion, upon the opinion of other counsel of good standing believed to be
reliable and who are satisfactory to counsel for the Underwriters, and such
counsel may rely as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of the Issuer and public officials.
References to the Prospectus in this paragraph (c) include any supplements
thereto at the Time of Purchase.

               (d) The Representative and the Bond Trustee shall have
         received on the Time of Purchase an opinion letter or letters of
         Skadden, Arps, Slate, Meagher & Flom LLP, special Delaware counsel
         to the Issuer, dated the Time of Purchase, in form and substance
         reasonably satisfactory to the Representative, to the effect that:

                           (i) The Issuer LLC Agreement constitutes a valid
               and binding agreement of the Company, as the sole member of
               the Issuer, and is enforceable against the Company in
               accordance with its terms;


<PAGE>

                           (ii) If properly presented to a Delaware court,
               a Delaware court applying Delaware law would conclude that
               (i) compliance with Section 3.04(b)(iv) of the Issuer LLC
               Agreement requiring a prior unanimous written consent of the
               Issuer's Managers, including each of the Independent
               Managers, to commence a voluntary case under Title 11 of the
               United States Code (a "Voluntary Case") for the Issuer, is
               necessary in order to commence a Voluntary Case, and (ii)
               Section 3.04(b)(iv) of the Issuer LLC Agreement requiring a
               prior written unanimous consent of the Issuer's Managers,
               including each of the Independent Managers, to commence a
               Voluntary Case for the Issuer, constitutes a legal, valid
               and binding agreement of the Company, and is enforceable
               against the Company, as the sole member of the Issuer, in
               accordance with its terms;

                           (iii) Under the Delaware Limited Liability
               Company Act, 6 Del. C. 18-101, et seq. (the "LLC Act"), and
               the Issuer LLC Agreement, the bankruptcy or dissolution of
               the Company would not, by itself, cause the Issuer to be
               dissolved or its affairs to be wound up;

                           (iv) Under the LLC Act, a judgment creditor of
               the Company may not attach specific assets of the Issuer
               directly and may not satisfy its claims against the Company
               by asserting a claim directly against the assets of the
               Issuer;

                           (v) Under the LLC Act (i) the Issuer is a
               separate legal entity, and (ii) the existence of the Issuer
               as a separate legal entity will continue until the
               cancellation of the Issuer Certificate of Formation;

               (e) The Representative and the Bond Trustee shall have
         received on the Time of Purchase an opinion letter or letters of
         Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the
         Issuer, dated the Time of Purchase, in form and substance
         reasonably satisfactory to the Representative, to the effect that,
         under federal law:

                           (i) In a properly presented and argued case, as
               a legal matter, and based upon existing case law, a
               bankruptcy court, would hold that compliance with those
               provisions of the Issuer LLC Agreement requiring the prior
               unanimous written consent of the Issuer's Managers to
               commence a voluntary case under Title 11 of the United
               States Code (a "Voluntary Case") is necessary in order to
               commence a Voluntary Case;


<PAGE>

                           (ii) The bankruptcy or dissolution of the
               Company would not, by itself, cause the Issuer to be
               dissolved or its affairs to be wound up;

                           (iii) A judgment creditor of the Company may not
               satisfy its claims against the Company by asserting these
               claims directly against the assets of the Issuer, and

                           (iv) (A) The Issuer is a separate legal entity,
               and (B) the existence of the Issuer as a separate legal
               entity will continue until the cancellation of its Issuer
               Certificate of Formation.

               (f) The Representative and the Issuer have received opinions
         of Stradley, Ronon, Stevens & Young, LLP, counsel to the Bond
         Trustee, Emmet, Marvin & Martin, LLP, counsel to the Bond Trustee,
         and Miller, Canfield, Paddock and Stone, P.L.C., or such other
         counsel as may be acceptable to the Representative, dated the Time
         of Purchase, in form and substance reasonably satisfactory to the
         Representative, to the effect that:

                           (i) the Bond Trustee is a banking corporation
               validly existing under the laws of the State of New York;

                           (ii) the Bond Trustee has the requisite power
               and authority to execute and deliver the Indenture and the
               Intercreditor Agreement, and each of the Indenture and the
               Intercreditor Agreement has been duly executed and delivered
               by the Bond Trustee, and constitutes a legal, valid and
               binding obligation of the Bond Trustee enforceable against
               the Bond Trustee in accordance with its terms (subject, as
               to enforcement of remedies, to applicable bankruptcy,
               reorganization, insolvency, moratorium or other similar laws
               or equitable principles affecting creditors' rights
               generally from time to time in effect); and

                           (iii) the Securitization Bonds have been duly
               authenticated by the Bond Trustee.


<PAGE>

               (g) Representative shall have received from Orrick,
         Herrington & Sutcliffe LLP, counsel for the Underwriters, such
         opinion or opinions, dated the Time of Purchase, with respect to
         the issuance and sale of the Securitization Bonds, the Indenture,
         the Registration Statement, the Prospectus (together with any
         supplement thereto) and other related matters as the
         Representative may reasonably require, and the Company, the Seller
         and the Issuer shall have furnished to such counsel such documents
         as they request for the purpose of enabling them to pass upon such
         matters.

               (h) The Representative and the Bond Trustee shall have
         received a certificate of the Issuer, signed by the President and
         the principal financial or accounting officer of the Issuer, dated
         the Time of Purchase, to the effect that the signers of such
         certificate have carefully examined the Registration Statement,
         the Prospectus, any supplement to the Prospectus, the Indenture
         and this Agreement and that:

                           (i) the representations and warranties of the
               Issuer in this Agreement and in the Indenture are true and
               correct in all material respects on and as of the Time of
               Purchase with the same effect as if made on the Time of
               Purchase, and the Issuer has complied with all the
               agreements and satisfied all the conditions on its part to
               be performed or satisfied at or prior to the Time of
               Purchase;

                           (ii) no stop order suspending the effectiveness
               of the Registration Statement has been issued and no
               proceedings for that purpose have been instituted or, to the
               Issuer's best knowledge, threatened; and

                           (iii) since the dates as of which information is
               given in the Prospectus (exclusive of any supplement
               thereto), there has been no material adverse change in (A)
               the condition (financial or other), prospects, earnings,
               business or properties of the Issuer, whether or not arising
               from transactions in the ordinary course of business, or (B)
               the Securitization Property, except as set forth in or
               contemplated in the Prospectus (exclusive of any supplement
               thereto).


<PAGE>

               (i) The Representative and the Bond Trustee shall have
         received a certificate of the Company, signed by a Vice President
         and the Treasurer of the Company, dated the Time of Purchase, to
         the effect that the signers of such certificate have carefully
         examined the Registration Statement, the Prospectus, any
         supplement to the Prospectus, the Sale Agreement, the Servicing
         Agreement and this Agreement and that:

                           (i) the representations and warranties of the
               Company in this Agreement, the Sale Agreement and the
               Servicing Agreement are true and correct in all material
               respects on and as of the Time of Purchase with the same
               effect as if made on the Time of Purchase, and the Company
               has complied with all the agreements and satisfied all the
               conditions on its part to be performed or satisfied at or
               prior to the Time of Purchase;

                           (ii) no stop order suspending the effectiveness
               of the Registration Statement has been issued and no
               proceedings for that purpose have been instituted or, to the
               Company's best knowledge, threatened; and

                           (iii) since the dates as of which information is
               given in the Prospectus (exclusive of any supplement
               thereto), there has been no material adverse change in (A)
               the condition (financial or other), prospects, earnings,
               business or properties of the Company and its subsidiaries
               taken as a whole, whether or not arising from transactions
               in the ordinary course of business, or (B) the
               Securitization Property, except as set forth in or
               contemplated in the Prospectus (exclusive of any supplement
               thereto).

               (j) On the date of the Time of Purchase, the Representative
         shall have received from Arthur Anderson LLP:

                           (i) a letter in form and substance satisfactory
               to the Representative, dated as of such date, confirming
               that they are independent public accountants within the
               meaning of the Act and the applicable published rules and
               regulations of the Commission thereunder and stating that
               they have audited the financial statement of the Issuer
               included in the Registration Statement and the Prospectus as
               set forth in their report included therein and stating in
               effect that they have performed certain specified procedures
               as a result of which they determined that certain
               information of an accounting, financial or statistical
               nature (which is limited to accounting, financial or
               statistical information derived from the general accounting
               records of the Company and its subsidiaries) set forth in
               the Registration Statement and the Prospectus agrees with
               the accounting records of the Company and its subsidiaries,
               excluding any questions of legal interpretation; and


<PAGE>

                           (ii) the opinion or certificate, dated the Time
               of Purchase, in form and substance satisfactory to the
               Representative, satisfying the requirements of Section
               2.10(b)(vi) of the Indenture.

         References to the Prospectus in this paragraph (j) include any
supplement thereto at the date of the letter.

         In addition, on the date execution of this Agreement, Arthur
Anderson LLP shall have furnished to the Representative a letter or
letters, dated the date of execution of this Agreement, in form and
substance satisfactory to the Representative, to the effect set forth
above.

               (k) The Representative and the Issuer shall have received on
         the Time of Purchase (A) an opinion letter or letters of Skadden,
         Arps, Slate Meagher & Flom LLP, outside counsel to the Company and
         the Issuer, dated the Time of Purchase, in form and substance
         reasonably satisfactory to the Representative that, in the event
         of the bankruptcy of the Company, (i) the transfer of the right,
         title and interest of the Company in, to and under the
         Securitization Property would be treated as a true sale to the
         Issuer, such that (a) section 362(a) of the United States
         Bankruptcy Code would not apply to prevent the Company in its
         capacity as Servicer from paying collections of the Securitization
         Charge to the Issuer and its assigns as provided in the Servicing
         Agreement, and (b) the Securitization Property or collections of
         the Securitization Charge imposed on account of Securitization
         Property transferred by the Company to the Issuer would not become
         property of the Company's bankruptcy estate under section
         541(a)(1) or 541(a)(6) of the United States Bankruptcy Code, and
         (ii) a creditor or trustee of the Company (or the Company as
         debtor in possession) would not have valid grounds to have a court
         disregard the limited liability company form of the Issuer so as
         to cause a substantive consolidation of the assets and liabilities
         of the Issuer with the assets and liabilities of the Company in a
         manner prejudicial to the holders of Securitization Bonds; and (B)
         an opinion letter of Miller, Canfield, Paddock and Stone, P.L.C.,
         special Michigan counsel for the Issuer, dated the Time of
         Purchase, in form and substance reasonably satisfactory to the
         Representative, that the transfer of the Securitization Property
         pursuant to the Sale Agreement constitutes a true sale to the
         Issuer of the Securitization Property.

               (l) Subsequent to the date of execution of this Agreement
         or, if earlier, the dates as of which information is given in the
         Registration Statement (exclusive of any amendment thereof) and
         the Prospectus (exclusive of any supplement thereto), there shall
         not have been any change, or any development involving a
         prospective change, in or affecting either (i) the business,
         business prospects, properties or financial condition of the
         Company or the Issuer, or (ii) the Securitization Property, the
         Securitization Bonds, the Financing Order or the Customer Choice
         Act, the effect of which is, in the case of either clause (i) or
         (ii), in the judgment of the Representative, so material and
         adverse as to make it impractical or inadvisable to proceed with
         the offering or delivery of the Securitization Bonds as
         contemplated by the Registration Statement (exclusive of any
         amendment thereof) and the Prospectus (exclusive of any supplement
         thereto).

               (m) Prior to the Time of Purchase, no stop order suspending
         the effectiveness of the Registration Statement shall have been
         issued under the Act by the Commission or proceedings therefor
         initiated or threatened.


<PAGE>

               (n) The Company and the Issuer shall have performed such of
         their respective obligations under this Agreement as are to be
         performed at or before the Time of Purchase by the terms hereof.

               (o) The Securitization Bonds shall have been rated in the
         highest long-term rating category by each of the Rating Agencies.

               (p) Any filing of the Prospectus and any supplements thereto
         required pursuant to Rule 424 under the Act shall have been made
         in compliance with Rule 424 in the time periods provided by Rule
         424.

               (q) On or prior to the Time of Purchase, the Issuer shall
         have delivered to the Representative evidence, in form and
         substance reasonably satisfactory to the Representative, that
         appropriate filings have been made in accordance with applicable
         law to perfect the grant of a security interest by the Issuer in
         the Securitization Property, the other Collateral, and the
         proceeds thereof to the Bond Trustee, including any necessary
         filings with the Michigan Public Service Commission and the filing
         of the UCC financing statements in the offices of the Secretaries
         of State of the State of Michigan and the State of Delaware.

               (r) On or prior to the Time of Purchase, the Issuer shall
         have delivered to the Representative a copy of the Michigan Public
         Service Commission's Financing Order relating to the
         Securitization Property and the Company shall have furnished to
         the Representative copies of the private letter ruling, dated
         November 15, 2000 issued by the Internal Revenue Service to the
         Company.

               (s) On or prior to the Time of Purchase, the Issuer shall
         have furnished to the Representative the documents required
         pursuant to Section 2.10(b) of the Indenture.

               (t) On or prior to the Time of Purchase, the Company shall
         have delivered to the Representative evidence, in form and
         substance reasonably satisfactory to the Representative, that
         appropriate filings have been made in accordance with applicable
         law to perfect the grant of a security interest by the Company in
         the Securitization Property to the Issuer and to perfect the
         transfer of the Securitization Property by the Company to the
         Issuer pursuant to the Sale Agreement, including any necessary
         filings with the Michigan Public Service Commission and the filing
         of the UCC financing statements in the office of the Secretary of
         State of the State of Michigan.


<PAGE>

               (u) On or prior to the Time of Purchase, the Issuer shall
         have delivered to the Representative copies of the UCC search
         reports referred to in Section 3(c) of this Agreement, along with
         copies of all filings referenced in such search reports.

               (v) On or prior to the Time of Purchase, the Issuer shall
         have delivered to the Representative copies of (i) the RPA's (as
         defined in the Intercreditor Agreement) as amended to reflect the
         provisions specified in Exhibit A to the Intercreditor Agreement
         and (ii) all filed amendments to UCC financing statements
         necessary to reflect such amendments to the RPA's.

               (w) Prior to the Time of Purchase, the Issuer and the
         Company shall have furnished to the Representative such further
         information,
         certificates, opinions and documents as the Representative may
         reasonably request, including any documents provided to the Rating
         Agencies.

         If any of the conditions specified in this Section 3 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Representative and
counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the
Time of Purchase by the Representative. Notice of such cancellation shall
be given to the Issuer in writing or by telephone or telegraph confirmed in
writing.

         The documents required to be delivered by this Section 3 shall be
delivered at the offices of Skadden, Arps, Slate, Meagher & Flom, LLP in
New York City on the Time of Purchase.

4.       Conditions of the Issuer's Obligations:  The obligation of the Issuer
hereunder to sell the Securitization Bonds are subject to the satisfaction of
the condition set forth in Section 3(m).

5.       Certain Covenants of the Issuer: In further consideration of the
agreements of the Underwriters herein contained, the Issuer covenants as
follows:

               (a) To use its best efforts to cause any post-effective
         amendments to the Registration Statement to become effective as
         promptly as possible. During the time when a Prospectus is
         required to be delivered under the Act, the Issuer will comply so
         far as it is able with all requirements imposed upon it by the Act
         and the rules and regulations of the Commission to the extent
         necessary to permit the continuance of sales of or dealings in the
         Securitization Bonds in accordance with the provisions hereof and
         of the Prospectus.


<PAGE>

               (b) To deliver to the Representative a conformed copy of the
         Registration Statement and any amendments thereto (including all
         exhibits thereto) and full and complete sets of all comments of
         the Commission or its staff and all responses thereto with respect
         to the Registration Statement and any amendments thereto, and to
         furnish to the Representative, for each of the Underwriters,
         conformed copies of the Registration Statement and any amendments
         thereto, without exhibits.

               (c) As soon as the Issuer is advised thereof, to advise the
         Representative and confirm the advice in writing of: (i) the
         effectiveness of any amendment to the Registration Statement, (ii)
         any request made by the Commission for amendments to the
         Registration Statement, the Preliminary Prospectus or Prospectus
         or for additional information with respect thereto, (iii) when the
         Prospectus, the Preliminary Prospectus, and any supplement
         thereto, shall have been filed with the Commission pursuant to
         Rule 424(b), (iv) the suspension of qualification of the
         Securitization Bonds for sale under Blue Sky or state securities
         laws, and (v) the entry of a stop order suspending the
         effectiveness of the Registration Statement or of the initiation
         or threat or any proceedings for that purpose. The Issuer will use
         its best efforts to prevent the issuance of any such stop order
         and, if issued, to make every reasonable effort to obtain the
         lifting or removal thereof.

               (d) To deliver to the Underwriters, without charge, as soon
         as practicable, and from time to time during such period of time
         as they are required by law to deliver a prospectus, as many
         copies of the Preliminary Prospectus and the Prospectus (as
         supplemented or amended if the Issuer shall have made any
         supplements or amendments thereto) as the Representative may
         reasonably request; and in case any Underwriter is required to
         deliver a prospectus after the expiration of nine months after the
         date of the Prospectus, to furnish to the Representative, upon
         request, at the expense of such Underwriter, a reasonable quantity
         of a supplemental prospectus or of supplements to the Prospectus
         complying with Section 10(a)(3) of the Act. The Issuer shall
         furnish or cause to be furnished to the Representative copies of
         all reports on Form SR required by Rule 463 under the Act. The
         Issuer will pay the expenses of printing or other production of
         all documents specifically relating to the offering of the
         Securitization Bonds under the Act.


<PAGE>

               (e) For such period of time after the date of the Prospectus
         as the Underwriters are required by law to deliver a prospectus in
         respect of the Securitization Bonds, if any event shall have
         occurred as a result of which it is necessary to amend or
         supplement the Prospectus in order to make the statements therein,
         in light of the circumstances when the Prospectus is delivered to
         a purchaser, not misleading, or if it becomes necessary to amend
         or supplement the Prospectus to comply with law, to forthwith
         prepare and file with the Commission an appropriate amendment or
         supplement to the Prospectus and deliver to the Underwriters,
         without charge, such number of copies thereof as may be reasonably
         requested.

               (f) To use its best efforts to qualify the Securitization
         Bonds for offer and sale under the securities or Blue Sky laws of
         such jurisdictions as the Representative may designate and to pay
         (or cause to be paid), or reimburse (or cause to be reimbursed)
         the Underwriters and their counsel for, reasonable filing fees and
         expenses in connection therewith (including the reasonable fees
         and disbursements of counsel to the Underwriters and filing fees
         and expenses paid and incurred prior to the date hereof),
         provided, however, that the Issuer shall not be required to
         qualify to do business as a foreign corporation or as a securities
         dealer or to file a general consent to service of process or to
         file annual reports or to comply with any other requirements
         reasonably deemed by the Issuer to be unduly burdensome.

               (g) To pay all expenses, fees and taxes (other than transfer
         taxes on sales by the respective Underwriters) in connection with
         the issuance and delivery of the Securitization Bonds (including
         the reasonable fees and disbursements of counsel to the
         Underwriters).

               (h) Prior to the termination of the offering of the
         Securitization Bonds, to not file any amendment to the
         Registration Statement or supplement to the Prospectus (including
         the Basic Prospectus) unless the Issuer has furnished the
         Representative and counsel to the Underwriters with a copy for
         their review and comment a reasonable time prior to filing and has
         reasonably considered any comments of the Representative, or any
         such amendment or supplement to which such counsel shall
         reasonably object on legal grounds in writing, after consultation
         with the Representative. Subject to the foregoing sentence, the
         Issuer will cause the Prospectus, properly completed, and any
         supplement thereto to be filed with the Commission pursuant to the
         applicable paragraph of Rule 424(b) within the time period
         prescribed and will provide evidence satisfactory to the
         Representative of such timely filing.

               (i) So long as any of the Securitization Bonds are
         outstanding, to furnish to the Representative (A) as soon as
         available, a copy of each report filed with the Commission under
         the Exchange Act, or mailed to Securitization Bondholders, (B) a
         copy of any filings with the Michigan Public Service Commission or
         any other governmental agency or instrumentality relating to the
         Securitization Bonds, and (C) from time to time, any information
         concerning the Company or the Issuer, as the Representative may
         reasonably request.


<PAGE>

               (j) So long as may be required by law for the distribution
         of the Securitization Bonds by the Underwriters or by any dealers
         that participate in the distribution thereof, to comply with all
         requirements under the Exchange Act relating to the timely filing
         with the Commission of the Issuer's reports pursuant to Section 13
         of the Exchange Act.

               (k) To make generally available to the Securitization
         Bondholders, as soon as practicable, an "earning statement" (which
         need not be audited by independent public accountants) covering a
         twelve-month period commencing after the effective date of the
         Registration Statement and ending not later than 15 months
         thereafter, which shall comply in all material respects with and
         satisfy the provisions of Section 11(a) of the Act and Rule 158
         under the Act.

               (l) To the extent, if any, that any rating necessary to
         satisfy the conditions set forth in Section 3 of this Agreement is
         conditioned upon the furnishing of documents or the taking of
         other actions by the Issuer on or after the Time of Purchase, to
         furnish such documents and take such other actions as are
         reasonably required.

               (m) To file with the Commission a report on Form 8-K setting
         forth all Computational Materials (as such term is defined in
         Section 14) provided to the Issuer by an Underwriter and
         identified by it as such within the time period allotted for such
         filing pursuant to the No-Action Letters (as defined in Section
         14); provided, however, that prior to any filing of the
         Computational Materials by the Issuer, such Underwriter must
         comply with its obligations pursuant to Section 14 and the Issuer
         must receive a letter from Arthur Anderson LLP, certified public
         accountants, satisfactory in form and substance to the Issuer and
         such Underwriter, to the effect that such accountants have
         performed specified procedures, all of which have been agreed to
         by the Issuer and such Underwriter, as a result of which they have
         determined that the information included in the Computational
         Materials provided by such Underwriter to the Issuer for filing on
         Form 8-K pursuant to Section 14 and this subsection (m), and which
         the accountants have examined in accordance with such agreed upon
         procedures, is accurate except as to such matters that are not
         deemed by the Issuer and such Underwriter to be material. The
         Issuer shall file any corrected Computational Materials described
         in Section 14(a)(iii) as soon as practicable following receipt
         thereof.

6.       Certain Covenants of the Company:  In further consideration of the
agreements of the Underwriters herein contained, the Company covenants as
follows:


<PAGE>

               (a) To use its best efforts to cause any post-effective
         amendments to the Registration Statement to become effective as
         promptly as possible. The Company will use its best efforts to
         prevent the issuance by the Commission of any stop order
         suspending the effectiveness of the Registration Statement and, if
         issued, to obtain as soon as possible the withdrawal thereof.

               (b) So long as any of the Securitization Bonds are
         outstanding and the Company is the Servicer, to furnish to the
         Representative (A) as soon as available, a copy of each report
         filed by the Servicer or the Company with the Commission under the
         Exchange Act, or mailed by the Servicer or the Company to
         Securitization Bondholders, (B) a copy of any filings by the
         Servicer or the Company with the Michigan Public Service
         Commission or any other governmental agency or instrumentality
         relating to the Securitization Bonds, and (C) from time to time,
         any information concerning the Company and the Issuer as the
         Representative may reasonably request.

               (c) To the extent, if any, that any rating necessary to
         satisfy the conditions set forth in Section 3 of this Agreement is
         conditioned upon the furnishing of documents or the taking of
         other actions by the Company on or after the Time of Purchase, to
         furnish such documents and take such other actions as are
         reasonably required.

7.       Representations and Warranties of the Company:  The Company represents
and warrants to, and agrees with, each of the Underwriters that, as of the
date hereof and as of the Time of Purchase:

               (a) The Registration Statement has become effective under
         the Act; a true and correct copy of the Registration Statement in
         the form in which it became effective has been delivered to the
         Representative and to the Representative for each of the
         Underwriters (except that copies delivered for the Underwriters
         excluded exhibits to such Registration Statement); any filing of
         the Prospectus and any supplements thereto required pursuant to
         Rule 424(b) has been or will be made in the manner and within the
         time period required by Rule 424(b); no stop order suspending the
         effectiveness of the Registration Statement is in effect, and no
         proceedings for such purposes are pending before or, to the
         knowledge of the Company, threatened by the Commission. On the
         effective date of the Registration Statement, the Registration
         Statement and the Basic Prospectus complied, or were deemed to
         have complied, and on its respective issue date, each preliminary
         prospectus filed pursuant to Rule 424(b) complied, and the Basic
         Prospectus complied, and on its issue date, the Prospectus will
         comply, or will be deemed to comply, in all material respects with
         the applicable provisions of the Act, the Trust Indenture Act and

<PAGE>

         the published rules and regulations of the Commission; on the
         effective date of the Registration Statement and at the Time of
         Purchase the Indenture did or will comply in all material respects
         with the requirements of the Trust Indenture Act and the rules
         thereunder; none of the Registration Statement, the Basic
         Prospectus, or any other preliminary prospectus, contained any
         untrue statement of a material fact or omitted to state a material
         fact required to be stated therein or necessary to make the
         statements therein not misleading, and the Prospectus, as amended
         or supplemented, if applicable, as of the Time of Purchase, will
         not contain any untrue statement of a material fact or omit to
         state a material fact necessary to make the statements therein, in
         the light of the circumstances under which they were made, not
         misleading, except that the Company makes no warranty or
         representation to any Underwriter with respect to any statements
         or omissions made therein in reliance upon and in conformity with
         information furnished in writing to the Company or the Issuer by,
         or through the Representative on behalf of, any Underwriter
         expressly for use therein, or to any statements in or omissions
         from that part of the Registration Statement that shall constitute
         the Statement of Eligibility and Qualification under the Trust
         Indenture Act of the Bond Trustee under the Indenture;

               (b) The documents incorporated by reference in the
         Registration Statement, any preliminary prospectus, the Basic
         Prospectus and the Prospectus, when they were filed (or, if an
         amendment with respect to any such document was filed, when such
         amendment was filed) with the Commission, conformed in all
         material respects to the requirements of the Exchange Act and the
         rules and regulations of the Commission promulgated thereunder,
         and any further documents so filed and incorporated by reference
         will, when they are filed with the Commission, conform in all
         material respects to the requirements of the Exchange Act and the
         rules and regulations of the Commission promulgated thereunder;
         none of such documents, when it was filed (or, if an amendment
         with respect to any such document was filed, when such amendment
         was filed), contained an untrue statement of a material fact or
         omitted to state a material fact required to be stated therein or
         necessary to make the statements therein, in light of the
         circumstances under which they were made, not misleading; and no
         such further document, when it is filed, will contain an untrue
         statement of a material fact or will omit to state a material fact
         required to be stated therein or necessary to make the statements
         therein, in light of the circumstances under which they are made,
         not misleading;

               (c) the Company has been duly incorporated and is validly
         existing as a corporation in good standing under laws of the State
         of Michigan, with power and authority (corporate and other) to own
         its properties and conduct its businesses as described in the
         Registration Statement and the Prospectus, and is duly qualified
         to do business in all jurisdictions (and is in good standing under
         the laws of all such jurisdictions) to the extent that such
         qualification and good standing is or shall be necessary to
         protect the validity and enforceability of this Agreement, the
         Servicing Agreement, the Sale Agreement, the Administration
         Agreement and each other instrument or agreement necessary or
         appropriate to the proper administration of this Agreement and the
         transactions contemplated hereby;

               (d) this Agreement, the Servicing Agreement, the Sale
         Agreement, the Administration Agreement and each of the other
         Basic Documents to which the Company is a party have been duly
         authorized, executed and delivered, and constitute valid and
         legally binding obligations of the Company enforceable according
         to their terms;


<PAGE>

               (e) there is no pending or threatened action, suit or
         proceeding before any court or governmental agency, authority or
         body or any arbitrator involving the Company or any of its
         subsidiaries (other than the Issuer) of a character required to be
         disclosed in the Registration Statement that is not adequately
         disclosed in the Prospectus, and there is no franchise, contract
         or other document of a character required to be described in the
         Registration Statement or Prospectus, or to be filed as an
         exhibit, that is not described or filed as required;

               (f) no consent, approval, authorization or order of any
         court or governmental agency or body is required for the
         consummation of the transactions contemplated herein and by the
         Basic Documents, except such as have been obtained under the
         Michigan law and such as may be required under the blue sky laws
         of any jurisdiction in connection with the purchase and
         distribution of the Securitization Bonds by the Underwriters and
         such other approvals as have been obtained;

               (g) neither the execution and delivery of this Agreement,
         the Servicing Agreement, the Sale Agreement, the Administration
         Agreement, and the other Basic Documents nor the consummation of
         the transactions contemplated thereby nor the fulfillment of the
         terms thereof by the Company, will (A) conflict with, result in
         any breach of any of the terms or provisions of, or constitute
         (with or without notice or lapse of time) a default under the
         articles of incorporation, bylaws or other organizational
         documents of the Company, or conflict with or breach any of the
         terms or provisions of, or constitute (with or without notice or
         lapse of time) a default under, any indenture, material agreement
         or other material instrument to which the Company is a party or by
         which the Company is bound, (B) result in the creation or
         imposition of any lien upon any properties of the Company pursuant
         to the terms of any such indenture, agreement or other instrument
         (other than as contemplated by the Indenture and the Customer
         Choice Act, or (C) violate any law or any order, rule or
         regulation applicable to the Company of any court or of any
         federal or state regulatory body, administrative agency or other
         governmental instrumentality having jurisdiction over the Company
         or any of its properties;

               (h) except as described in the Registration Statement and
         the Prospectus, the Company holds all franchises, certificates of
         public convenience, licenses and permits necessary to carry on the
         utility business in which it is engaged;

               (i) there has not been any material and adverse change in
         (A) the condition (financial or other), prospects, earnings,
         business or properties of the Company, whether or not arising from
         transactions in the ordinary course of business, or (B) the
         Securitization Property, except as set forth in or contemplated in
         the Prospectus (exclusive of any supplement thereto); and

               (j) except as set forth in the Basic Prospectus, no event or
         condition exists that constitutes, or with the giving of notice or
         lapse of time or both would constitute, a default or any breach or
         failure to perform by the Company in any material respect under
         any indenture, mortgage, loan agreement, lease or other material
         agreement or instrument to which the Company is a party or by
         which it or any of its properties may be bound.
<PAGE>

8.       Representations and Warranties of the Issuer:  The Issuer represents
and warrants to, and agrees with, each of the Underwriters that, as of the
date hereof and as of the Time of Purchase:

               (a) The Registration Statement has become effective under
         the Act; a true and correct copy of the Registration Statement in
         the form in which it became effective has been delivered to the
         Representative and to the Representative for each of the
         Underwriters (except that copies delivered for the Underwriters
         excluded exhibits to such Registration Statement); any filing of
         the Prospectus and any supplements thereto required pursuant to
         Rule 424(b) has been or will be made in the manner and within the
         time period required by Rule 424(b); no stop order suspending the
         effectiveness of the Registration Statement is in effect, and no
         proceedings for such purposes are pending before or, to the
         knowledge of the Issuer, threatened by the Commission. On the
         effective date of the Registration Statement, the Registration
         Statement and the Basic Prospectus complied, or were deemed to
         have complied, and on its respective issue date, each preliminary
         prospectus filed pursuant to Rule 424(b) complied, and the Basic
         Prospectus complied, and on its issue date, the Prospectus will
         comply, or will be deemed to comply, in all material respects with
         the applicable provisions of the Act, the Trust Indenture Act and
         the published rules and regulations of the Commission; on the
         effective date of the Registration Statement and at the Time of
         Purchase the Indenture did or will comply in all material respects
         with the requirements of the Trust Indenture Act and the rules
         thereunder; none of the Registration Statement, the Basic
         Prospectus, or any other preliminary prospectus, contained any
         untrue statement of a material fact or omitted to state a material
         fact required to be stated therein or necessary to make the
         statements therein not misleading, and the Prospectus, as amended
         or supplemented, if applicable, as of the Time of Purchase, will
         not contain any untrue statement of a material fact or omit to
         state a material fact necessary to make the statements therein, in
         the light of the circumstances under which they were made, not
         misleading, except that the Issuer makes no warranty or
         representation to any Underwriter with respect to any statements
         or omissions made therein in reliance upon and in conformity with
         information furnished in writing to the Company or the Issuer by,
         or through the Representative on behalf of, any Underwriter
         expressly for use therein, or to any statements in or omissions
         from that part of the Registration Statement that shall constitute
         the Statement of Eligibility and Qualification under the Trust
         Indenture Act of the Bond Trustee under the Indenture;

               (b) The documents incorporated by reference in the
         Registration Statement, any preliminary prospectus, the Basic
         Prospectus and the Prospectus, when they were filed (or, if an
         amendment with respect to any such document was filed, when such
         amendment was filed) with the Commission, conformed in all
         material respects to the requirements of the Exchange Act and the
         rules and regulations of the Commission promulgated thereunder,
         and any further documents so filed and incorporated by reference

<PAGE>

         will, when they are filed with the Commission, conform in all
         material respects to the requirements of the Exchange Act and the
         rules and regulations of the Commission promulgated thereunder;
         none of such documents, when it was filed (or, if an amendment
         with respect to any such document was filed, when such amendment
         was filed), contained an untrue statement of a material fact or
         omitted to state a material fact required to be stated therein or
         necessary to make the statements therein, in light of the
         circumstances under which they were made, not misleading; and no
         such further document, when it is filed, will contain an untrue
         statement of a material fact or will omit to state a material fact
         required to be stated therein or necessary to make the statements
         therein, in light of the circumstances under which they are made,
         not misleading;

               (c) the Issuer has been duly organized and is validly
         existing as a limited liability company in good standing under
         laws of the State of Delaware, with power and authority (corporate
         and other) to own its properties and conduct its businesses as
         described in the Registration Statement and the Prospectus, and is
         duly qualified to do business in all jurisdictions (and is in good
         standing under the laws of all such jurisdictions) to the extent
         that such qualification and good standing is or shall be necessary
         to protect the validity and enforceability of this Agreement, the
         Sale Agreement, the Indenture, the Servicing Agreement, the
         Administration Agreement and each other instrument or agreement
         necessary or appropriate to the proper administration of this
         Agreement and the transactions contemplated hereby;

               (d) this Agreement, the Servicing Agreement, the Indenture,
         the Administration Agreement, the Sale Agreement and each of the
         other Basic Documents to which the Issuer is a party have been
         duly authorized, executed and delivered, and constitute valid and
         legally binding obligations of the Issuer enforceable according to
         their terms;

               (e) there is no pending or threatened action, suit or
         proceeding before any court or governmental agency, authority or
         body or any arbitrator involving the Issuer or any of its
         subsidiaries of a character required to be disclosed in the
         Registration Statement that is not adequately disclosed in the
         Prospectus, and there is no franchise, contract or other document
         of a character required to be described in the Registration
         Statement or Prospectus, or to be filed as an exhibit, that is not
         described or filed as required;

               (f) no consent, approval, authorization or order of any
         court or governmental agency or body is required for the
         consummation of the transactions contemplated herein and by the
         Basic Documents, except such as have been obtained under the
         Michigan law and such as may be required under the blue sky laws
         of any jurisdiction in connection with the purchase and
         distribution of the Securitization Bonds by the Underwriters and
         such other approvals as have been obtained;


<PAGE>

               (g) neither the execution and delivery of this Agreement,
         the Servicing Agreement, the Sale Agreement, the Indenture, the
         Administration Agreement and the other Basic Documents nor the
         consummation of the transactions contemplated thereby nor the
         fulfillment of the terms thereof by the Issuer, will (A) conflict
         with, result in any breach of any of the terms or provisions of,
         or constitute (with or without notice or lapse of time) a default
         under the certificate of formation, operating agreement or other
         organizational documents of the Issuer, or conflict with or breach
         any of the terms or provisions of, or constitute (with or without
         notice or lapse of time) a default under, any indenture, material
         agreement or other material instrument to which the Issuer is a
         party or by which the Issuer is bound, (B) result in the creation
         or imposition of any lien upon any properties of the Issuer
         pursuant to the terms of any such indenture, agreement or other
         instrument (other than as contemplated by the Indenture and the
         Customer Choice Act, or (C) violate any law or any order, rule or
         regulation applicable to the Issuer of any court or of any federal
         or state regulatory body, administrative agency or other
         governmental instrumentality having jurisdiction over the Issuer
         or any of its properties;

               (h) except as described in the Registration Statement and
         the Prospectus, the Issuer holds all franchises, certificates of
         public convenience, licenses and permits necessary to carry on the
         utility business in which it is engaged;

               (i) there has not been any material and adverse change in
         (A) the condition (financial or other), prospects, earnings,
         business or properties of the Issuer, whether or not arising from
         transactions in the ordinary course of business, or (B) the
         Securitization Property, except as set forth in or contemplated in
         the Prospectus (exclusive of any supplement thereto); and

               (j) except as set forth in the Basic Prospectus, no event or
         condition exists that constitutes, or with the giving of notice or
         lapse of time or both would constitute, a default or any breach or
         failure to perform by the Issuer in any material respect under any
         indenture, mortgage, loan agreement, lease or other material
         agreement or instrument to which the Issuer is a party or by which
         it or any of its properties may be bound.

         9.       Representation and Warranties of Underwriters:
                  ---------------------------------------------

         Each Underwriter warrants and represents that the information, if
         any, furnished in writing to the Company through the
         Representative expressly for use in the Registration Statement and
         Prospectus is correct in all material respects as to such
         Underwriter. Each Underwriter, in addition to other information
         furnished to the Company for use in the Registration Statement and
         Prospectus, herewith furnishes to the Company for use in the
         Registration Statement and Prospectus, the information stated
         herein with regard to the public offering, if any, by such
         Underwriter and represents and warrants that such information is
         correct in all material respects as to such Underwriter.

         10.      Indemnification:
                  ---------------


<PAGE>

         (a)      Each of the Company and the Issuer agrees jointly and
                  severally, to the extent permitted by law, to indemnify
                  and hold harmless each Underwriter, the directors,
                  officers, members, employees and agents of each
                  Underwriter, and each person, if any, who controls any
                  such Underwriter within the meaning of Section 15 of the
                  Act or Section 20 of the Exchange Act, against any and
                  all losses, claims, damages or liabilities, joint or
                  several, to which they or any of them may become subject
                  under the Act or otherwise, and to reimburse the
                  Underwriters and such persons, if any, for any legal or
                  other expenses incurred by them in connection with
                  defending any action, suit or proceeding (including
                  governmental investigations) as provided in Section 10(c)
                  hereof, insofar as such losses, claims, damages,
                  liabilities or actions, suits or proceedings (including
                  governmental investigations) arise out of or are based
                  upon any untrue statement or alleged untrue statement of
                  a material fact contained in (i) the Securitization
                  Property Information and the Computational Materials
                  delivered to investors by any Underwriter to the extent
                  such loss, claim, damage or liability arises from the
                  Securitization Property Information or (ii) the
                  Registration Statement, the Basic Prospectus, any
                  Preliminary Prospectus, the Prospectus, or in any
                  amendment or supplement thereto or arise out of or are
                  based upon any omission or alleged omission to state
                  therein a material fact required to be stated therein or
                  necessary to make the statements therein not misleading,
                  except insofar as such losses, claims, damages,
                  liabilities or actions arise out of or are based upon any
                  such untrue statement or alleged untrue statement or
                  omission or alleged omission which was made in such
                  Registration Statement, Basic Prospectus, Preliminary
                  Prospectus or Prospectus, or in the Prospectus as so
                  amended or supplemented, in reliance upon and in
                  conformity with information furnished in writing to the
                  Company by, or through the Representative on behalf of,
                  any Underwriter expressly for use therein or with
                  statements in or omissions from that part of the
                  Registration Statement that shall constitute the
                  Statement of Eligibility and Qualification under the
                  Trust Indenture Act of the Bond Trustee under the
                  Indenture, and except that this indemnity shall not inure
                  to the benefit of any Underwriter (or any person
                  controlling such Underwriter) on account of any losses,
                  claims, damages, liabilities or actions, suits or
                  proceedings arising from the sale of the Securitization
                  Bonds to any person if a copy of the Prospectus, as the
                  same may then be supplemented or amended (excluding,
                  however, any document then incorporated or deemed
                  incorporated therein by reference), was not sent or given
                  by or on behalf of such Underwriter to such person (i)
                  with or prior to the written confirmation of sale
                  involved or (ii) promptly after being provided to the
                  Representative by the Company or the Issuer after such
                  written confirmation, relating to an event occurring
                  prior to the payment for and delivery to such person of
                  the Securitization Bonds involved in such sale, and the

<PAGE>

                  omission or alleged omission or untrue statement or
                  alleged untrue statement was corrected in the Prospectus
                  as supplemented or amended at such time. As used herein,
                  the term "Securitization Property Information" means
                  information, whether in written or electronic format or
                  otherwise, regarding the Securitization Property provided
                  to the Underwriters by or on behalf of the Company or the
                  Issuer.

                  The Company's indemnity agreement contained in this
Section 10(a), and the covenants, representations and warranties of the
Company contained in this Agreement, shall remain in full force and effect
regardless of any investigation made by or on behalf of any person, and
shall survive the delivery of and payment for the Securitization Bonds
hereunder, and the indemnity agreement contained in this Section 10(a)
shall survive any termination of this Agreement. The liabilities of the
Company in this Section 10(a) are in addition to any other liabilities of
the Company under this Agreement or otherwise.

         (b)      Each Underwriter agrees, severally and not jointly, to
                  the extent permitted by law, to indemnify, hold harmless
                  and reimburse the Company and the Issuer, the directors,
                  officers, members, managers, employees and agents of the
                  Company and the Issuer, and each person, if any, who
                  controls the Company or the Issuer within the meaning of
                  Section 15 of the Act or Section 20 of the Exchange Act,
                  and such of the officers of the Issuer as shall have
                  signed the Registration Statement or any amendment
                  thereof, to the same extent and upon the same terms as
                  the indemnity agreement of the Company and the Issuer set
                  forth in Section 10(a) hereof, but only with respect to
                  alleged untrue statements or omissions made in the
                  Registration Statement, the Basic Prospectus or in the
                  Prospectus, as amended or supplemented (if applicable),
                  in reliance upon and in conformity with information
                  furnished in writing to the Company or the Issuer by such
                  Underwriter expressly for use therein.

                  The indemnity agreement on the part of each Underwriter
contained in this Section 10(b) and the representations and warranties of
such Underwriter contained in this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of the Company
or any other person, and shall survive the delivery of and payment for the
Securitization Bonds hereunder, and the indemnity agreement contained in
this Section 10(b) shall survive any termination of this Agreement. The
liabilities of each Underwriter in this Section 10(b) are in addition to
any other liabilities of such Underwriter under this Agreement or
otherwise.

         (c)      If a claim is made or an action, suit or proceeding
                  (including governmental investigations) is commenced or
                  threatened against any person as to which indemnity may
                  be sought under Section 10(a) or 10(b), such person (the
                  "Indemnified Person") shall notify the person against
                  whom such indemnity may be sought (the "Indemnifying
                  Person") promptly after any assertion of such claim
                  threatening to institute an action, suit or proceeding or
                  if such an action, suit or proceeding is commenced
                  against such Indemnified Person, promptly after such
                  Indemnified Person shall have been served with a summons
                  or other first legal process, giving information as to
                  the nature and basis of the claim. Failure to so notify
                  the Indemnifying Person shall not, however, relieve the

<PAGE>

                  Indemnifying Person from any liability which it may have
                  on account of the indemnity under Section 10(a) or 10(b)
                  if the Indemnifying Person has not been prejudiced in any
                  material respect by such failure. Subject to the
                  immediately succeeding sentence, the Indemnifying Person
                  shall assume the defense of any such litigation or
                  proceeding, including the employment of counsel and the
                  payment of all expenses, with such counsel being
                  designated, subject to the immediately succeeding
                  sentence, in writing by the Representative in the case of
                  parties indemnified pursuant to Section 10(b) and by the
                  Company and the Issuer in the case of parties indemnified
                  pursuant to Section 10(a); provided, however, that such
                  counsel shall be reasonably satisfactory to the
                  Indemnified Person. Any Indemnified Person shall have the
                  right to participate in such litigation or proceeding and
                  to retain its own counsel, but the fees and expenses of
                  such counsel shall be at the expense of such Indemnified
                  Person unless (i) the Indemnifying Person and the
                  Indemnified Person shall have mutually agreed to the
                  retention of such counsel, (ii) the named parties to any
                  such proceeding (including any impleaded parties) include
                  (x) the Indemnifying Person and (y) the Indemnified
                  Person and, in the written opinion of counsel to such
                  Indemnified Person, representation of both parties by the
                  same counsel would be inappropriate due to actual or
                  likely conflicts of interest between them, in either of
                  which cases the reasonable fees and expenses of counsel
                  (including disbursements) for such Indemnified Person
                  shall be reimbursed by the Indemnifying Person to the
                  Indemnified Person. If there is a conflict as described
                  in clause (ii) above, and the Indemnified Persons have
                  participated in the litigation or proceeding utilizing
                  separate counsel whose fees and expenses have been
                  reimbursed by the Indemnifying Person and the Indemnified
                  Persons, or any of them, are found to be solely liable,
                  such Indemnified Persons shall repay to the Indemnifying
                  Person such fees and expenses of such separate counsel as
                  the Indemnifying Person shall have reimbursed. It is
                  understood that the Indemnifying Person shall not, in
                  connection with any litigation or proceeding or related
                  litigation or proceedings in the same jurisdiction as to
                  which the Indemnified Persons are entitled to such
                  separate representation, be liable under this Agreement
                  for the reasonable fees and out-of-pocket expenses of
                  more than one separate firm (together with not more than
                  one appropriate local counsel) for all such Indemnified
                  Persons. Subject to the next paragraph, all such fees and
                  expenses shall be reimbursed by payment to the
                  Indemnified Persons of such reasonable fees and expenses
                  of counsel promptly after payment thereof by the
                  Indemnified Persons. In furtherance of the requirement
                  above that fees and expenses of any separate counsel for
                  the Indemnified Persons shall be reasonable, the
                  Representative, the Issuer and the Company agree that the
                  Indemnifying Person's obligations to pay such fees and
                  expenses shall be conditioned upon the following:

                  (1)      in case separate counsel is proposed to be
                           retained by the Indemnified Persons pursuant to
                           clause (ii) of the preceding paragraph, the
                           Indemnified Persons shall in good faith fully
                           consult with the Indemnifying Person in advance
                           as to the selection of such counsel;

                  (2)      reimbursable fees and expenses of such separate
                           counsel shall be detailed and supported in a
                           manner reasonably acceptable to the Indemnifying
                           Person (but nothing herein shall be deemed to
                           require the furnishing to the Indemnifying
                           Person of any information, including without
                           limitation, computer print-outs of lawyers'
                           daily time entries, to the extent that, in the
                           judgment of such counsel, furnishing such
                           information might reasonably be expected to
                           result in a waiver of any attorney-client
                           privilege); and
<PAGE>

                  (3)      the Issuer, the Company, the Representative and
                           the Underwriters shall cooperate in monitoring
                           and controlling the fees and expenses of
                           separate counsel for Indemnified Persons for
                           which the Indemnifying Person is liable
                           hereunder, and the Indemnified Person shall use
                           every reasonable effort to cause such separate
                           counsel to minimize the duplication of
                           activities as between themselves and counsel to
                           the Indemnifying Person.

                  The Indemnifying Person shall not be liable for any
settlement of any litigation or proceeding effected without the written
consent of the Indemnifying Person, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person
agrees, subject to the provisions of this Section 10, to indemnify the
Indemnified Person from and against any loss, damage, liability or expenses
by reason of such settlement or judgment. The Indemnifying Person shall
not, without the prior written consent of the Indemnified Persons, effect
any settlement of any pending or threatened litigation, proceeding or claim
in respect of which indemnity has been properly sought by the Indemnified
Persons hereunder, unless such settlement includes an unconditional release
by the claimant of all Indemnified Persons from all liability with respect
to claims which are the subject matter of such litigation, proceeding or
claim.

     11. Contribution: If the indemnification provided for in Section 10
above is unavailable to or insufficient to hold harmless an Indemnified
Person under such Section in respect of any losses, claims, damages or
liabilities (or actions, suits or proceedings (including governmental
investigations) in respect thereof) referred to therein, then each
Indemnifying Person under Section 10 shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion
as is appropriate to reflect the relative benefits received by the
Indemnifying Person on the one hand and the Indemnified Person on the other
from the offering of the Securitization Bonds. If, however, the allocation
provided by the immediately preceding sentence is not permitted by
applicable law, then each Indemnifying Person shall contribute to such
amount paid or payable by such Indemnified Person in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of each Indemnifying Person, if any, on the one hand and the
Indemnified Person on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions, suits or proceedings (including governmental investigations) in
respect thereof), as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Issuer on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Issuer and the total underwriting discounts and
commission received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus, bear to the aggregate public
offering price of the Securitization Bonds. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Issuer on the one hand or the Underwriters on the other and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company,
the Issuer and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 11 were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section
11. The amount paid or payable by an Indemnified Person as a result of the
losses, claims, damages or liabilities (or actions, suits or proceedings
(including governmental proceedings) in respect thereof) referred to above
in this Section 11 shall be deemed to include any legal or other expenses

<PAGE>

reasonably incurred by such Indemnified Person in connection with
investigating or defending any such action, suits or proceedings (including
governmental proceedings) or claim, provided that the provisions of Section
10 have been complied with (in all material respects) in respect of any
separate counsel for such Indemnified Person. Notwithstanding the
provisions of this Section 11 and except as may be provided in any
agreement among underwriters relating to the offering of the Securitization
Bonds, no Underwriter shall be required to contribute any amount in excess
of the underwriting discount or commission applicable to the Securitization
Bonds purchased by such Underwriter hereunder. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations in this
Section 11 to contribute are several in proportion to their respective
underwriting obligations and not joint.

                  The agreement with respect to contribution contained in
this Section 11 shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any Underwriter, and
shall survive delivery of and payment for the Securitization Bonds
hereunder and any termination of this Agreement.

                  For purposes of this Section 11, each person who controls
an Underwriter within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who
controls the Issuer or the Company within the meaning of either the Act or
the Exchange Act, each officer of the Issuer or the Company who shall have
signed the Registration Statement and each director of the Issuer or the
Company shall have the same rights to contribution as the Issuer or the
Company, subject in each case to the applicable terms and conditions of
this Section 11.

     12. Default by an Underwriter: If any one or more Underwriters shall
fail to purchase and pay for any of the Securitization Bonds agreed to be
purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the nondefaulting Underwriters shall be
obligated severally to take up and pay for (in the respective proportions
which the amount of Securitization Bonds set forth opposite their names in
Schedule II hereto bears to the aggregate amount of Securitization Bonds
set forth opposite the names of all the remaining Underwriters) the
Securitization Bonds which the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that in the event that
the aggregate amount of Securitization Bonds which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10%
of the aggregate amount of Securitization Bonds set forth in Schedule II
hereto, the nondefaulting Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the
Securitization Bonds, and if such nondefaulting Underwriters do not
purchase all the Securitization Bonds, this Agreement will terminate
without liability to any nondefaulting Underwriter, the Issuer or the
Company. In the event of a default by any Underwriter as set forth in this
Section 12, the Time of Purchase shall be postponed for such period, not
exceeding three days, as the Representative shall determine in order that
the required changes in the Registration Statement and the Prospectus or in
any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting Underwriter of its liability,
if any, to the Issuer and the Company and any nondefaulting Underwriter for
damages occasioned by its default hereunder.


<PAGE>

     13. Termination of Agreement: This Agreement may be terminated at any
time prior to the Time of Purchase by the Representative in the absolute
discretion of the Representative, if, prior to such time (A) there shall
have occurred any change, or any development involving a prospective
change, in or affecting either (x) the business, business prospects,
properties or financial condition of the Issuer or the Company (as most
recently disclosed in documents filed with the Commission and publicly
available as of the date and time this Agreement is executed by the
Representative) or (y) the Securitization Property, the Securitization
Bonds, the Financing Order or the Customer Choice Act, the effect of which,
in the case of either clause (x) or (y), in the judgment of the
Representative, materially impairs the investment quality of the
Securitization Bonds or makes it impractical or inadvisable to market the
Securitization Bonds, or (B) (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the National Association of Securities Dealers,
Inc., the Chicago Board of Options Exchange or the Chicago Mercantile
Exchange, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities shall have been
declared by federal, New York State or Michigan State authorities or (iv)
the United States shall have become engaged in hostilities, there shall
have been an escalation of hostilities involving the United States, there
shall have been a declaration by the United States of a national emergency
or war or there shall have occurred any change in financial markets or any
calamity or crisis that, in the judgment of the Representative, is material
and adverse, and, in the case of any of the events specified in clauses
(B)(i) through (iv), such event singly or together with any other such
event makes it, in the judgment of the Representative, impracticable or
inadvisable to proceed with the offering or delivery of the Securitization
Bonds as contemplated by the Prospectus (exclusive of any supplement
thereto).

                  If the Representative elects to terminate this Agreement,
as provided in this Section 13, the Representative will promptly notify the
Company and each other Underwriter by telephone or telecopy, confirmed by
letter.

                  Notwithstanding the foregoing, the provisions of Sections
5(g), 10 and 11 shall survive any termination of this Agreement.

         14.      Computational Materials:
                  -----------------------

                  (a) In connection with the offering of the Securitization
         Bonds, each Underwriter may prepare and provide to prospective
         investors items similar to computational materials ("Computational
         Materials") as defined in the no-action letter of May 20, 1994
         issued by the Commission to Kidder, Peabody Acceptance Corporation
         I, Kidder, Peabody & Co. Incorporated and Kidder Structured Asset
         Corporation, as made applicable to other issuers and underwriters
         by the Commission in response to the request of the Public
         Securities Association dated May 24, 1994, as well as the
         no-action letter of February 17, 1995 issued by the Commission to
         the Public Securities Association (collectively, the "No-Action
         Letters"), subject to the following conditions:

                           (i) All Computational Materials provided to
               prospective investors that are required to be filed pursuant
               to the No-Action Letters shall bear a legend substantially
               in the form attached hereto as Exhibit A. The Issuer shall
               have the right to require additional specific legends or
               notations to appear on any Computational Materials, the
               right to require changes regarding the use of terminology
               and the right to determine the types of information
               appearing therein. Notwithstanding the foregoing, this
               subsection (i) will be satisfied if all Computational
               Materials referred to herein bear a legend in a form
               previously approved in writing by the Issuer.


<PAGE>

                           (ii) Such Underwriter shall provide to the
               Issuer, for approval by the Issuer, representative forms of
               all Computational Materials at least two business days prior
               to their first use. Such Underwriter shall provide to the
               Issuer, for filing on Form 8-K as provided in Section 5(m),
               copies (in such format as required by the Issuer) of all
               Computational Materials that are required to be filed with
               the Commission pursuant to the No-Action Letters. The
               Underwriter may provide copies of the foregoing in a
               consolidated or aggregated form including all information
               required to be filed if filing in such format is permitted
               by the No-Action Letters. All Computational Materials
               described in this subsection (ii) must be provided to the
               Issuer not later than 10:00 a.m. New York City time at least
               two business days before filing thereof is required pursuant
               to the terms of this Agreement. Such Underwriter shall not
               provide to any investor or prospective investor in the
               Securitization Bonds any Computational Materials on or after
               the day on which Computational Materials are required to be
               provided to the Issuer pursuant to this paragraph (ii)
               (other than copies of Computational Materials previously
               submitted to the Issuer in accordance with this paragraph
               (ii) for filing pursuant to Section 5(m)), unless such
               Computational Materials are preceded or accompanied by the
               delivery of a Prospectus to such investor or prospective
               investor.

                           (iii) The Issuer shall not be obligated to file
               any Computational Materials that have been determined to
               contain any material error or omission, provided that, at
               the request of any Underwriter, the Issuer will file
               Computational Materials that contain a material error or
               omission if clearly marked "SUPERSEDED BY MATERIALS DATED
               _________" and accompanied by corrected Computational
               Materials that are marked, "MATERIAL PREVIOUSLY DATED
               _________, AS CORRECTED." If, within the period during which
               a prospectus relating to the Securitization Bonds is
               required to be delivered under the Act, any Computational
               Materials are determined, in the reasonable judgment of the
               Issuer or such Underwriter, to contain a material error or
               omission, such Underwriter shall prepare a corrected version
               of such Computational Materials, shall circulate such
               corrected Computational Materials to all recipients of the
               prior versions thereof that either indicated orally to such
               Underwriter they would purchase all or any portion of the
               Securitization Bonds, or actually purchased all or any
               portion thereof, and shall deliver copies of such corrected
               Computational Materials (marked "AS CORRECTED") to the
               Issuer for filing with the Commission in a subsequent Form
               8-K submission (subject to the Issuer's obtaining an
               accountant's comfort letter in respect of such corrected
               Computational Materials).


<PAGE>

               (b) Each Underwriter shall be deemed to have represented, as
         of the Time of Purchase, that, except for Computational Materials
         provided to the Issuer pursuant to subsection (a) above and except
         for the Preliminary Prospectus, such Underwriter did not provide
         any prospective investors with any information in written or
         electronic form in connection with the offering of the
         Securitization Bonds that is required to be filed with the
         Commission in accordance with the No-Action Letters.

               (c) In the event of any delay in the delivery by any
         Underwriter to the Issuer of all Computational Materials required
         to be delivered in accordance with subsection (a) above, or in the
         delivery of the accountant's comfort letter in respect thereof
         pursuant to Section 5(m), the Issuer shall have the right to delay
         the release of the Prospectus to investors or to any Underwriter,
         to delay the Time of Purchase and to take other appropriate
         actions, in each case set forth in Section 5(m), to file the
         Computational Materials by the time specified therein.

               (d) Each Underwriter further represents and warrants that,
         if and to the extent it has provided any prospective investors
         with any Computational Materials prior to the date hereof in
         connection with the offering of the Securitization Bonds, all of
         the conditions set forth in clause (a) of this Section 14 have
         been satisfied with respect thereto.

               (e) Each Underwriter severally agrees that it shall comply
         with all applicable laws and regulations in connection with the
         use of Computational Materials.

         15. Notices: All notices hereunder shall, unless otherwise
expressly provided, be in writing and be delivered at or mailed to the
following addresses or be sent by telecopy as follows: if to the
Underwriters or the Representative, to the Representative at the address or
number, as appropriate, designated in Schedule I hereto, and, if to the
Company, to it at, Consumers Energy Company, 212 W. Michigan Avenue,
Jackson, Michigan 49201, Attention: Thomas McNish, Corporate Secretary; and
if sent to the Issuer, to it at Consumers Funding LLC, 212 W. Michigan
Avenue, Suite M-1029, Jackson, Michigan 49201, Attention: Managers.

         16. Parties in Interest: The Agreement herein set forth has been
and is made solely for the benefit of the Underwriters, the Company
(including the directors thereof and such of the officers thereof as shall
have signed the Registration Statement), and the controlling persons, if
any, referred to in Section 10 hereof, and their respective successors,
assigns, executors and administrators, and no other person shall acquire or
have any right under or by virtue of this Agreement.

         17. Miscellaneous: All obligations of the Underwriters hereunder
are several and not joint. The term "successors" as used in this Agreement
shall not include any purchaser, as such purchaser, of any of the
Securitization Bonds from any of the respective Underwriters.


<PAGE>

         18. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.

         19. Counterparts: This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which
shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.


                  If the foregoing is in accordance with your
understanding, please sign and return to us counterparts hereof, and upon
the acceptance hereof by you, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters and the
Company.

                                   Very truly yours,


                                   CONSUMERS ENERGY COMPANY

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

                                   CONSUMERS FUNDING LLC

                                   By: /s/ Laura L. Mountcastle
                                       ------------------------------------
                                       Name: Laura L. Mountcastle
                                       Title:  President, Chief Executive
                                               Officer, Chief Financial Officer
                                               and Treasurer



Confirmed and accepted as
of the date first written above:


MORGAN STANLEY & CO. INCORPORATED

     by:  /s/ Gail McDonnell
          ----------------------------------
          Name: Gail McDonnell
          Title:   Managing Director

for themselves and the other several Underwriters,
if any, named in Schedule I to the foregoing Agreement.

<PAGE>



                         Schedule I:_Representative



                     Morgan Stanley & Co. Incorporated
                     1585 Broadway
                     New York, New York 10036




<TABLE>
<CAPTION>

                         Schedule II: Underwriters
                         -------------------------

          Principal Amount of Securitization Bonds to be Purchased

                              Morgan             Banc One
                              Stanley & Co.      Capital               Barclays        J.P. Morgan
Loop Capital
                              Incorporated       Markets, Inc.         Capital         Securities Inc.
Markets, LLC
                              ------------       -------------         --------        ---------------
- -------------
<S>                         <C>                   <C>                 <C>               <C>
Class A-1
Securitization Bonds         $ 15,600,000          $ 3,640,000         $ 3,640,000          $ 2,340,000
$ 780,000

Class A-2
Securitization Bonds           50,400,000           11,760,000          11,760,000            7,560,000
2,520,000

Class A-3
Securitization Bonds           18,600,000            4,340,000           4,340,000
2,790,000             930,000

Class A-4
Securitization Bonds           57,000,000           13,300,000          13,300,000            8,550,000
2,850,000

Class A-5
Securitization Bonds           70,200,000           16,380,000          16,380,000           10,530,000
3,510,000

Class A-6
Securitization Bonds           69,355,200           16,182,880          16,182,880           10,403,280
3,467,760

         Total               $281,155,200          $65,602,880         $65,602,880          $42,173,280
$14,057,760

</TABLE>


<PAGE>


                                Schedule III

               Information Regarding the Securitization Bonds

Title, Purchase Price and Description of Securitization Bonds:

         Title:   Consumers Funding LLC $468,592,000 Securitization Bonds,
                  Series 2001-1

         Principal Amount, Price to Public, Underwriting Discounts and
         Commissions, Purchase Price to the Issuer, and Required Ratings:


<TABLE>
<CAPTION>

                             Total Principal                     Underwriting
Required
                             Amount of          Price to         Discounts and           Proceeds to
Ratings
                             Class              Public           Commissions             the Issuer
(Fitch/Moody's/S&P)
                             ---------------    --------         -------------           -----------
- -------------------
<S>                         <C>               <C>                <C>                    <C>             <C>

Class A-1
Securitization Bonds         $ 26,000,000        99.99590%          0.370%               $ 25,902,845
AAA/Aaa/AAA

Class A-2
Securitization Bonds           84,000,000        99.99182%          0.462%                 83,605,169
AAA/Aaa/AAA

Class A-3
Securitization Bonds           31,000,000        99.95901%          0.662%                 30,782,193
AAA/Aaa/AAA

Class A-4
Securitization Bonds           95,000,000        99.96793%          0.782%                 94,226,753
AAA/Aaa/AAA

Class A-5
Securitization Bonds          117,000,000        99.97673%          0.817%                116,017,004
AAA/Aaa/AAA

Class A-6
Securitization Bonds          115,592,000        99.98053%          0.897%                114,532,754
AAA/Aaa/AAA

         Total               $468,592,000                                                $465,066,718
</TABLE>


<PAGE>


                                 EXHIBIT A
                                 ---------

This information has been prepared in connection with the issuance of the
securities described herein, and is based on information provided by
Consumers Funding LLC and Consumers Energy Company with respect to the
expected characteristics of the securitization property securing these
securities. The actual characteristics and performance of the
securitization property will differ from the assumptions used in preparing
these materials, which are hypothetical in nature. Changes in the
assumptions may have a material impact on the information set forth in
these materials. No representation is made that any performance or return
indicated herein will be achieved. This information may not be used or
otherwise disseminated in connection with the offer or sale of these or any
other securities, except in connection with the initial offer or sale of
these securities to you to the extent set forth below. NO REPRESENTATION IS
MADE AS TO THE APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF
THESE MATERIALS OR THE ASSUMPTIONS ON WHICH THEY ARE BASED. The
underwriters disclaim any and all liability relating to this information,
including without limitation any express or implied representations and
warranties for statements contained in, and omissions from, this
information. Additional information is available upon request. These
materials do not constitute an offer to buy or sell or a solicitation of an
offer to buy or sell any security or instrument or to participate in any
particular trading strategy. ANY SUCH OFFER TO BUY OR SELL ANY SECURITY
WOULD BE MADE PURSUANT TO A DEFINITIVE PROSPECTUS AND PROSPECTUS SUPPLEMENT
PREPARED BY THE ISSUER WHICH WOULD CONTAIN MATERIAL INFORMATION NOT
CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT
WILL CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY SUCH SECURITY
OFFERED THEREBY AND ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE
MADE SOLELY IN RELIANCE UPON SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. ANY
CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN ARE TO BE READ IN CONJUNCTION
WITH SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. In the event of any such
offering, these materials, including any description of the securitization
property contained herein, shall be deemed superseded, amended and
supplemented in their entirety by such Prospectus and Prospectus
Supplement. To Our Readers Worldwide: In addition, please note that this
information has been provided by Morgan Stanley & Co., Incorporated and
approved by Morgan Stanley & Co. International Limited, a member of the
Securities and Futures Authority, and Morgan Stanley Japan Ltd. We
recommend that investors obtain the advice of their Morgan Stanley & Co.
International Limited or Morgan Stanley Japan Ltd. representative about the
investment concerned. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS DEFINED
BY THE U.K. SECURITIES AND FUTURES AUTHORITY.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.G
<SEQUENCE>4
<FILENAME>k65350ex4-g.txt
<DESCRIPTION>CERTIFICATE OF TRUST OF CMS ENERGY FINANCING V
<TEXT>
<PAGE>

                                                                  EXHIBIT (4)(G)

                              CERTIFICATE OF TRUST
                                       OF
                      CONSUMERS ENERGY COMPANY FINANCING V

         The undersigned, constituting all of the trustees of Consumers Energy
Company Financing V, desiring to form a business trust pursuant to the Delaware
Business Trust Act, 12 Del. C. Section 3801, et seq., hereby certify as follows:

         (a)       Name. The name of the business trust being formed hereby (the
                   "Trust") is "Consumers Energy Company Financing V."

         (b)       Delaware Trustee. The Name and business address of the
                   trustee of the Trust which has its principal place of
                   business in the State of Delaware are as follows:

                   The Bank of New York (Delaware)
                   White Clay Center, Route 273
                   Newark, Delaware  19711

         (c)       Effective Date. This Certificate of Trust shall be effective
                   as of the date of filing with the Secretary of State of the
                   State of Delaware.

Dated:  November 21, 2001

         IN WITNESS WHEREOF, the undersigned, being the Trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.


                                      /s/Alan M. Wright
                                     Alan M. Wright, as Regular Trustee


                                      /s/Thomas A. McNish
                                     Thomas A. McNish, as Regular Trustee



                                     The Bank of New York (Delaware), as
                                                Delaware Trustee


                                     By: /s/William T. Lewis
                                        Name:  William T. Lewis
                                        Title: SVP



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.H
<SEQUENCE>5
<FILENAME>k65350ex4-h.txt
<DESCRIPTION>CERTIFICATE OF TRUST OF CMS ENERGY FINANCING VI
<TEXT>
<PAGE>


                                                                  EXHIBIT (4)(H)


                              CERTIFICATE OF TRUST
                                       OF
                     CONSUMERS ENERGY COMPANY FINANCING VI

         The undersigned, constituting all of the trustees of Consumers Energy
Company Financing VI, desiring to form a business trust pursuant to the Delaware
Business Trust Act, 12 Del. C. Section 3801, et seq., hereby certify as follows:

         (a)       Name. The name of the business trust being formed hereby (the
                   "Trust") is "Consumers Energy Company Financing VI."

         (b)       Delaware Trustee. The Name and business address of the
                   trustee of the Trust which has its principal place of
                   business in the State of Delaware are as follows:

                   The Bank of New York (Delaware)
                   White Clay Center, Route 273
                   Newark, Delaware  19711

         (c)       Effective Date. This Certificate of Trust shall be effective
                   as of the date of filing with the Secretary of State of the
                   State of Delaware.

Dated:  November 21, 2001

         IN WITNESS WHEREOF, the undersigned, being the Trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.



                                     /s/Alan M. Wright
                                     Alan M. Wright, as Regular Trustee


                                     /s/Thomas A. McNish
                                     Thomas A. McNish, as Regular Trustee


                                     The Bank of New York (Delaware), as
                                              Delaware Trustee

                                     By: /s/William T. Lewis
                                        Name:  William T. Lewis
                                        Title: SVP


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.P
<SEQUENCE>6
<FILENAME>k65350ex4-p.txt
<DESCRIPTION>INDENTURE DATED AS OF NOVEMBER 8, 2001
<TEXT>
<PAGE>
                                EXHIBIT 4(p)

                                 INDENTURE










                           CONSUMERS FUNDING LLC,

                                   Issuer


                                    and


                           THE BANK OF NEW YORK,

                                  Trustee

                           ---------------------

                                 INDENTURE

                        Dated as of November 8, 2001

                           ---------------------

                       Securing Securitization Bonds

                             Issuable in Series



<PAGE>



                             TABLE OF CONTENTS


                                 ARTICLE I

                 Definitions and Incorporation by Reference

SECTION 1.01   Definitions...................................................2
SECTION 1.02   Incorporation by Reference of the Trust Indenture Act.........2
SECTION 1.03   Rules of Construction.........................................3

                                 ARTICLE II

                          The Securitization Bonds

SECTION 2.01   Form..........................................................3
SECTION 2.02   Execution, Authentication and Delivery........................4
SECTION 2.03   Denominations; Securitization Bonds Issuable in Series........4
SECTION 2.04   Temporary Securitization Bonds................................5
SECTION 2.05   Registration; Registration of Transfer and Exchange...........6
SECTION 2.06   Mutilated, Destroyed, Lost or Stolen Securitization Bonds.....7
SECTION 2.07   Persons Deemed Owner..........................................8
SECTION 2.08   Payment of Principal and Interest; Interest on Overdue
               Principal; Principal and Interest Rights Preserved............8
SECTION 2.09   Cancellation.................................................10
SECTION 2.10   Amount; Authentication and Delivery of Securitization
               Bonds........................................................10
SECTION 2.11   Book-Entry Securitization Bonds..............................15
SECTION 2.12   Notices to Clearing Agency...................................16
SECTION 2.13   Definitive Securitization Bonds..............................16

                                ARTICLE III

                                 Covenants

SECTION 3.01   Payment of Principal and Interest............................17
SECTION 3.02   Maintenance of Office or Agency..............................18
SECTION 3.03   Money for Payments To Be Held in Trust.......................18
SECTION 3.04   Existence....................................................20
SECTION 3.05   Protection of Collateral.....................................20
SECTION 3.06   Opinions as to Collateral....................................20
SECTION 3.07   Performance of Obligations...................................21
SECTION 3.08   Negative Covenants...........................................21
SECTION 3.09   Annual Statement as to Compliance............................22
SECTION 3.10   Issuer May Consolidate, etc., Only on Certain Terms..........22
SECTION 3.11   Successor or Transferee......................................23
SECTION 3.12   No Other Business............................................24
SECTION 3.13   No Borrowing.................................................24
SECTION 3.14   Guarantees, Loans, Advances and Other Liabilities............24
SECTION 3.15   Capital Expenditures.........................................24
SECTION 3.16   Restricted Payments..........................................24
SECTION 3.17   Notice of Events of Default..................................25
SECTION 3.18   Inspection...................................................25
SECTION 3.19   Adjusted Overcollateralization Balance Schedules.............25
SECTION 3.20   Sale Agreement, Servicing Agreement and Swap Agree
               ment Covenants...............................................25
SECTION 3.21   Taxes........................................................29

                                 ARTICLE IV

                   Satisfaction and Discharge; Defeasance

SECTION 4.01   Satisfaction and Discharge of Indenture; Defeasance..........29
SECTION 4.02   Conditions to Defeasance.....................................31
SECTION 4.03   Application of Trust Money...................................32
SECTION 4.04   Repayment of Moneys Held by Paying Agent.....................32

                                 ARTICLE V

                                  Remedies

SECTION 5.01   Events of Default............................................33
SECTION 5.02   Acceleration of Maturity; Rescission and Annulment...........34
SECTION 5.03   Collection of Indebtedness and Suits for Enforcement by
               Trustee......................................................35
SECTION 5.04   Remedies.....................................................37
SECTION 5.05   Optional Preservation of the Collateral......................38
SECTION 5.06   Limitation of Proceedings....................................38
SECTION 5.07   Unconditional Rights of Securitization Bondholders To
               Receive Principal and Interest...............................39
SECTION 5.08   Restoration of Rights and Remedies...........................39
SECTION 5.09   Rights and Remedies Cumulative...............................40
SECTION 5.10   Delay or Omission Not a Waiver...............................40
SECTION 5.11   Control by Securitization Bondholders........................40
SECTION 5.12   Waiver of Past Defaults......................................41
SECTION 5.13   Undertaking for Costs........................................41
SECTION 5.14   Waiver of Stay or Extension Laws.............................42
SECTION 5.15   Action on Securitization Bonds...............................42

                                 ARTICLE VI

                                The Trustee

SECTION 6.01   Duties and Liabilities of Trustee............................42
SECTION 6.02   Rights of Trustee............................................43
SECTION 6.03   Individual Rights of Trustee.................................44
SECTION 6.04   Trustee's Disclaimer.........................................44
SECTION 6.05   Notice of Defaults...........................................45
SECTION 6.06   Reports by Trustee to Holders................................45
SECTION 6.07   Compensation and Indemnity...................................46
SECTION 6.08   Replacement of Trustee.......................................46
SECTION 6.09   Successor Trustee by Merger..................................47
SECTION 6.10   Appointment of Co-Trustee or Separate Trustee................48
SECTION 6.11   Eligibility; Disqualification................................49
SECTION 6.12   Preferential Collection of Claims Against Issuer.............49
SECTION 6.13   Representations and Warranties of the Trustee................49

                                ARTICLE VII

               Securitization Bondholders' Lists and Reports

SECTION 7.01   Issuer To Furnish Trustee Names and Addresses of
               Securitization Bondholders...................................50
SECTION 7.02   Preservation of Information; Communications to
               Securitization Bondholders...................................50
SECTION 7.03   Reports by Issuer............................................50
SECTION 7.04   Reports by Trustee...........................................51
SECTION 7.05   Provision of Servicer Reports................................51
<PAGE>
                                ARTICLE VIII

                    Accounts, Disbursements and Releases

SECTION 8.01   Collection of Money..........................................52
SECTION 8.02   Collection Account...........................................52
SECTION 8.03   Release of Collateral........................................58
SECTION 8.04   Issuer Opinion of Counsel....................................58
SECTION 8.05   Reports by Independent Accountants...........................58

                                 ARTICLE IX

                          Supplemental Indentures

SECTION 9.01   Supplemental Indentures Without Consent of Securitiza
               tion Bondholders.............................................59
SECTION 9.02   Supplemental Indentures with Consent of Securitization
               Bondholders..................................................61
SECTION 9.03   Execution of Supplemental Indentures.........................62
SECTION 9.04   Effect of Supplemental Indenture.............................63
SECTION 9.05   Conformity with Trust Indenture Act..........................63
SECTION 9.06   Reference in Securitization Bonds to Supplemental Inden
               tures........................................................63

                                 ARTICLE X

                     Redemption of Securitization Bonds

SECTION 10.01  Optional Redemption by Issuer................................63
SECTION 10.02  Mandatory Redemption by Issuer...............................64
SECTION 10.03  Form of Redemption Notice....................................64
SECTION 10.04  Payment of Redemption Price..................................65

                                 ARTICLE XI

                               Miscellaneous

SECTION 11.01  Compliance Certificates and Opinions, etc....................65
SECTION 11.02  Form of Documents Delivered to Trustee.......................66
SECTION 11.03  Acts of Securitization Bondholders...........................67
SECTION 11.04  Notices, etc., to Trustee, Issuer and Rating Agencies........67
SECTION 11.05  Notices to Securitization Bondholders; Waiver................68
SECTION 11.06  Notices to Luxembourg Stock Exchange.........................69
SECTION 11.07  Alternate Payment and Notice Provisions......................69
SECTION 11.08  Conflict with Trust Indenture Act............................69
SECTION 11.09  Effect of Headings and Table of Contents.....................70
SECTION 11.10  Successors and Assigns.......................................70
SECTION 11.11  Severability.................................................70
SECTION 11.12  Benefits of Indenture........................................70
SECTION 11.13  Legal Holidays...............................................70
SECTION 11.14  Governing Law................................................70
SECTION 11.15  Counterparts.................................................70
SECTION 11.16  Issuer Obligation............................................70
SECTION 11.17  No Petition..................................................71

<PAGE>
APPENDIX A     MASTER DEFINITIONS


         INDENTURE, dated as of November 8, 2001, by and between CONSUMERS
FUNDING LLC, a Delaware limited liability company, as Issuer, and THE BANK
OF NEW YORK, a New York banking corporation in its capacity as trustee for
the benefit of the Holders of the Securitization Bonds and as agent for
itself and any Swap Counterparty (collectively, the "Trustee").

         The Issuer has duly authorized the execution and delivery of this
Indenture to provide for one or more Series of Securitization Bonds,
issuable as provided in this Indenture. Each such Series of Securitization
Bonds will be issued only under a separate Series Supplement to this
Indenture duly executed and delivered by the Issuer and the Trustee. The
Issuer is entering into this Indenture, and the Trustee is accepting the
trusts created hereby, each for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and each intending
to be legally bound hereby.

                              GRANTING CLAUSE

         The Issuer hereby Grants to the Trustee as trustee for the benefit
of (i) the Holders of the Securitization Bonds from time to time issued and
outstanding, (ii) the Trustee and (iii) any Swap Counterparty, all of the
Issuer's right, title and interest whether now owned or hereafter acquired,
in, to and under: (a) all Securitization Property transferred by the Seller
to the Issuer from time to time pursuant to the Sale Agreement, including,
without limitation, all Securitiza tion Charge Collections, provided that,
for the avoidance of doubt, 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, (b)
the Sale Agreement, (c) all Bills of Sale delivered by the Seller pursuant
to the Sale Agreement, (d) the Servicing Agreement, (e) the Administration
Agreement, (f) any Interest Rate Swap Agreement; (g) the Intercreditor
Agreement, (h) the Collection Account and all sub-accounts thereof (other
than the Capital Reserve Subaccount) (including, without limitation, the
General Subaccount, each Series Overcollateralization Subaccount, each
Series Capital Subaccount, the Reserve Subaccount, each Series Subaccount,
any Class Subaccount and any Defeasance Subaccount) and all cash,
securities, instruments, investment property or other assets deposited in
or credited to the Collection Account or any subaccount thereof (other than
the Capital Reserve Subaccount) from time to time or purchased with funds
therefrom, (i) all investment property and all other property of whatever
kind owned from time to time by the Issuer, including rights under any
interest rate swap or cap agreement, other than: (w) any cash released to
any Swap Counterparty by the Trustee from the related Class Subaccount
pursuant to Section 8.02(f) and any interest rate swap or cap agreement,
(x) any cash or other property released to the Issuer by the Trustee from
any Series Capital Subaccount pursuant to Section 8.02(g)(x) and (y) the
proceeds from the sale of the Securitization Bonds used to pay (1) the
costs of issuance of the Securitization Bonds and all other up-front
qualified costs permitted by the Financing Order and (2) the purchase price
of the Securitization Property pursuant to the Sale Agreement, (j) all
present and future claims, demands, causes and choses in action in respect
of any or all of the foregoing and (k) all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion, voluntary or
involuntary, into cash or other liquid property, all cash proceeds,
accounts, accounts receivable, general intangibles, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condem nation awards, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property which
at any time constitute all or part of or are included in the proceeds of
any of the foregoing (collectively, the "Collateral").

         Such Grants are made to the Trustee to have and to hold in trust
to secure the payment of principal of, and interest on, and any other
amounts owing in respect of, the Securitization Bonds and all fees,
expenses, counsel fees and other amounts due and owing to the Trustee and,
if and to the extent provided in any Series Supplement, any amounts due and
owing to any Swap Counterparty (collectively, the "Secured Obligations"),
equally and ratably without prejudice, preference, priority or distinction,
except as expressly provided in this Indenture and to secure performance by
the Issuer of all of the Issuer's obligations under this Indenture with
respect to the Securitization Bonds, all as provided in this Indenture.

         The Trustee, as trustee on behalf of the Holders of the
Securitization Bonds, acknowledges such Grant, accepts the trusts hereunder
in accordance with the provisions hereof and agrees to perform its duties
herein required.

<PAGE>
                                 ARTICLE I

                 Definitions and Incorporation by Reference

         SECTION 1.01 Definitions. Capitalized terms used but not otherwise
defined in this Indenture have the respective meanings set forth in
Appendix A hereto unless the context otherwise requires.

         SECTION 1.02 Incorporation by Reference of the Trust Indenture
Act. Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this
Indenture. Each of the following TIA terms used in this Indenture has the
following meaning:

         "Commission" means the Securities and Exchange Commission.

         "indenture securities" means the Securitization Bonds.

         "indenture to be qualified" means this Indenture.

         "indenture trustee" or "institutional trustee" means the Trustee.

All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.

         SECTION 1.03 Rules of Construction.

         (a) An accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time;

         (b) "including" means including without limitation;

         (c) with respect to terms defined in Appendix A hereto, words in
the singular include the plural and words in the plural include the
singular;

         (d) unless otherwise specified, references herein to Sections or
Articles are to Sections or Articles of this Indenture; and

         (e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.


                                 ARTICLE II

                          The Securitization Bonds

         SECTION 2.01 Form. (a) The Securitization Bonds and the Trustee's
certificate of authentication shall be in substantially the forms set forth
in Exhibit A to the related Series Supplement, with such appropriate
insertions, omissions, substitutions and other varia tions as are required
or permitted by this Indenture or by the related Series Supplement and may
have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may, consistently herewith, be
determined by the Managers of the Issuer executing such Securitization
Bonds, as evidenced by their execution of such Securitization Bonds. Any
portion of the text of any Securitization Bond may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the
Securitization Bond. Each Securitization Bond shall be dated the date of
its authentication.

         (b) The Securitization Bonds shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods
(with or without steel engraved borders), all as determined by the Managers
of the Issuer executing such Securitization Bonds, as evidenced by their
execution of such Securitization Bonds.

         (c) Each Securitization Bond shall bear upon its face the
designation so selected for the Series and Class, if any, to which it
belongs. The terms of all Securitization Bonds of the same Series shall be
the same, unless such Series is comprised of one or more Classes, in which
case the terms of all Securitization Bonds of the same Class shall be the
same.

         (d) Each Securitization Bond shall state that under the Customer
Choice Act the State of Michigan pledges, for the benefit and protection of the
Holders of the Securitization Bonds, other persons acting for the benefit of a
Holder and Consumers, that it will not take or permit any action that would
impair the value of the Securitization Property, reduce or alter, except as
allowed under section 10k(3) of the Customer Choice Act with respect to periodic
adjustments of the Securitization Charges, or impair the Securitization Charges
to be imposed, collected, and remitted to\the Trustee, 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. The Issuer is authorized to include this pledge in any
documen tation relating to the Securitization Bonds.

<PAGE>

         SECTION 2.02 Execution, Authentication and Delivery. (a) The
Securitiza tion Bonds shall be executed on behalf of the Issuer by a
Manager. The signature of any such Manager on the Securitization Bonds may
be manual or facsimile.

         (b) Securitization Bonds bearing the manual or facsimile signature
of individuals who were at any time Managers shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the authentication and delivery of such
Securitization Bonds.

         (c) At any time and from time to time after the execution and
delivery of this Indenture, the Issuer may deliver Securitization Bonds
executed on behalf of the Issuer to the Trustee pursuant to an Issuer Order
for authentication; and the Trustee shall authenticate and deliver such
Securitization Bond as in this Indenture provided and not otherwise.

         (d) No Securitization Bond shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose, unless there
appears on such Securitization Bond a certificate of authentication
substantially in the form provided for herein executed by the Trustee by
the manual signature of one of its authorized signatories, and such
certificate upon any Securitization Bond shall be conclusive evidence, and
the only evidence, that such Securiti zation Bond has been duly
authenticated and delivered hereunder.

         (e) To the extent any of the Securitization Bonds are listed on
the Luxem bourg Stock Exchange and the rules and regulations of such
exchange so require, a transfer or other agent appointed pursuant to
Section 3.02(b) shall be authorized on behalf of the Trustee to execute and
deliver such certificate of authentication.

         SECTION 2.03 Denominations; Securitization Bonds Issuable in
Series. (a) The Securitization Bonds of each Series shall be issuable as
registered Securitization Bonds in the Authorized Denominations specified
in the Series Supplement therefor.

         (b) The Securitization Bonds may, at the election of and as
authorized by a Manager and set forth in a Series Supplement, be issued in
one or more Series (each of which may be comprised of one or more Classes),
and shall be designated generally as the "Securitiza tion Bonds" of the
Issuer, with such further particular designations added or incorporated in
such title for the Securitization Bonds of any particular Series or Class
as a Manager of the Issuer may determine and be set forth in the Series
Supplement therefor.

         (c) Each Series of Securitization Bonds shall be created by a
Series Supple ment authorized by a Manager and establishing the terms and
provisions of such Series and, if applicable, any Classes thereof. The
several Series and any Classes thereof may differ as between Series and
Classes, in respect of any of the following matters:

               (i) designation of the Series and each Class thereof;

               (ii) the aggregate initial principal amount of the
      Securitization Bonds of the Series and each Class thereof;

               (iii) the Interest Rate of the Series and each Class thereof
      or the formula, if any, used to calculate the applicable Interest
      Rate or Interest Rates for the Series and each Class thereof;

               (iv) the Payment Dates of the Series and each Class thereof;

               (v) the Expected Final Payment Date of the Series and each
      Class thereof;
<PAGE>

               (vi) the Final Maturity Date of the Series and each Class
      thereof;

               (vii) the Series Issuance Date of the Series;

               (viii) the place or places for payments with respect to the
      Series and each Class thereof;

               (ix) the Authorized Denominations for the Series and each
      Class thereof;

               (x) the provisions, if any, for redemption by the Issuer of
      the Series and each Class thereof;

               (xi) the Expected Amortization Schedule for the Series and
      each Class thereof;

               (xii) the Overcollateralization Amount with respect to the
      Series;

               (xiii) the Required Capital Amount with respect to the
      Series;

               (xiv) the Calculation Dates and Adjustment Dates for the
      Series;

               (xv) the credit enhancement, if any, applicable to the
      Series and each Class thereof; and

               (xvi) any other terms of the Series or each Class that are
      not inconsistent with the provisions of this Indenture.

         SECTION 2.04 Temporary Securitization Bonds. (a) Pending the
prepara tion of definitive Securitization Bonds pursuant to Section 2.13 or
in the case of Securitization Bonds held in a book-entry only system by a
Clearing Agency, a Manager on behalf of the Issuer may execute, and upon
receipt of an Issuer Order the Trustee shall authenticate and deliver,
temporary Securitization Bonds which are printed, lithographed,
typewritten, mimeographed or otherwise produced, of the tenor of the
definitive Securitization Bonds in lieu of which they are issued and with
such variations not inconsistent with the terms of this Indenture as the
Manager executing such Securitization Bonds may determine, as evidenced by
their execution of such Securitization Bonds.

         (b) If temporary Securitization Bonds are issued, the Issuer will
cause definitive Securitization Bonds to be prepared without unreasonable
delay except where temporary Securitization Bonds are held by a Clearing
Agency. After the preparation of definitive Securitization Bonds, the
temporary Securitization Bonds shall be exchangeable for definitive
Securitization Bonds upon surrender of the temporary Securitization Bonds
at the office or agency of the Issuer to be maintained as provided in
Section 3.02, without charge to any Holder. Upon surrender for cancellation
of any one or more temporary Securitization Bonds, a Manager on behalf of
the Issuer shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like Series (and if applicable, Class) and aggregate
initial principal amount of definitive Securitization Bonds in Authorized
Denominations. Until so exchanged, the temporary Securitization Bonds shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securitization Bonds.

         SECTION 2.05 Registration; Registration of Transfer and Exchange.
(a) The Issuer shall cause to be kept a register (the "Securitization Bond
Register") in which, subject to such reasonable regulations as it may
prescribe, the Issuer shall provide for the registration of Securitization
Bonds and the registration of transfers of Securitization Bonds. The
Trustee shall be the registrar (the Trustee or any successor thereof in
such capacity, the "Securitization Bond Registrar") for the purpose of
registering Securitization Bonds and transfers of Securitization Bonds as
herein provided. Upon any resignation of any Securitization Bond Registrar,
the Issuer shall promptly appoint a successor or, if it elects not to make
such an appointment, assume the duties of Securitization Bond Registrar.

         (b) If a Person other than the Trustee is appointed by the Issuer
as Securitiza tion Bond Registrar, the Issuer shall give the Trustee and
any transfer, paying or listing agent of the Issuer appointed pursuant to
Section 3.02(b) prompt written notice of the appointment of such
Securitization Bond Registrar and of the location, and any change in the
location, of the Securitization Bond Register; the Trustee and any such
agent shall have the right to inspect the Securitization Bond Register at
all reasonable times and to obtain copies thereof; and the Trustee and any
such agent shall have the right to rely upon a certificate executed on
behalf of the Securitization Bond Registrar by a duly authorized officer
thereof as to the names and addresses of the Holders of the Securitization
Bonds and the original and Outstanding principal amounts and number of such
Securitization Bonds (separately stated by Series and, if applicable,
Class).

<PAGE>
         (c) Upon surrender for registration of transfer of any
Securitization Bond at the office or agency of the Issuer to be maintained
as provided in Section 3.02, a Manager on behalf of the Issuer shall
execute, and the Trustee shall authenticate and the Securitization
Bondholder shall obtain from the Trustee, in the name of the designated
transferee or transferees, one or more new Securitization Bonds in any
Authorized Denominations, of a like Series (and, if applicable, Class) and
aggregate initial principal amount.

         (d) At the option of the Holder, Securitization Bonds may be
exchanged for other Securitization Bonds of a like Series (and, if
applicable, Class) and aggregate initial principal amount in Authorized
Denominations, upon surrender of the Securitization Bonds to be exchanged
at such office or agency as provided in Section 3.02. Whenever any
Securitization Bonds are so surrendered for exchange, a Manager on behalf
of the Issuer shall execute, and the Trustee shall authenticate and the
Securitization Bondholder shall obtain from the Trustee, the Securitization
Bonds which the Securitization Bondholder making the exchange is entitled
to receive.

         (e) All Securitization Bonds issued upon any registration of
transfer or exchange of Securitization Bonds shall be the valid obligations
of the Issuer, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Securitization Bonds surrendered upon such
registration of transfer or exchange.

         (f) Every Securitization Bond presented or surrendered for
registration of transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer in such form as is
satisfactory to the Trustee duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing, with such signature
guaranteed by an Eligible Guarantor Institution in the form set forth in
such Securitization Bond.

         (g) No service charge shall be made to a Holder for any
registration of transfer or exchange of Securitization Bonds (except as may
be required by the rules and regulations of the Luxembourg Stock Exchange
with respect to any Securitization Bonds listed thereon), but, other than
in respect of exchanges pursuant to Sections 2.04 or 9.06 not involving any
transfer, the Issuer may require payment by such Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securitization
Bonds, including the fees and expenses of the Trustee.

         (h) The preceding provisions of this Section 2.05 notwithstanding,
except to the extent otherwise required by the rules and regulations of the
Luxembourg Stock Exchange with respect to any Securitization Bonds listed
thereon, the Issuer shall not be required to make, and the Securitization
Bond Registrar need not register, transfers or exchanges of Securitization
Bonds selected for redemption or transfers or exchanges of any
Securitization Bond for a period of fifteen (15) days preceding the date on
which final payment of principal is to be made with respect to such
Securitization Bond.

         SECTION 2.06 Mutilated, Destroyed, Lost or Stolen Securitization
Bonds. (a) If (i) any mutilated Securitization Bond is surrendered to the
Trustee, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Securitization Bond, and (ii) there is
delivered to the Trustee such security or indemnity as may be required by
it to hold the Issuer and the Trustee harmless, then, in the absence of
notice to the Issuer, the Securitization Bond Registrar or the Trustee that
such Securitization Bond has been acquired by a protected purchaser, a
Manager on behalf of the Issuer shall execute, and upon a Manager's request
the Trustee shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Securitization Bond, a
replacement Securitization Bond of like Series (and, if applicable, Class),
tenor and initial principal amount in an Authorized Denomination, bearing a
number not contemporaneously outstanding; provided, however, that if any
such destroyed, lost or stolen Securitization Bond, but not a mutilated
Securitization Bond, shall have become or within seven days shall be due
and payable, or shall have been called for redemption, instead of issuing a
replacement Securitization Bond, the Issuer may pay such destroyed, lost or
stolen Securitization Bond when so due or payable or upon the Redemption
Date without surrender thereof. Upon issuance of any substituted
Securitization Bond, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other related expenses. If, after the
delivery of such replacement Securitization Bond or payment of a destroyed,
lost or stolen Securitization Bond pursuant to the proviso to the preceding
sentence, a protected purchaser of the original Securitization Bond in lieu
of which such replacement Securitization Bond was issued presents for
payment such original Securitization Bond, the Issuer and the Trustee shall
be entitled to recover such replacement Securitization Bond (or such
<PAGE>
payment) from the Person to whom it was delivered or any Person taking such
replacement Securitization Bond from such Person to whom such replacement
Securitization Bond was delivered or any assignee of such Person, except a
protected purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the Issuer or the Trustee in connection therewith.

         (b) Every replacement Securitization Bond issued pursuant to this
Section 2.06 in replacement of any mutilated, destroyed, lost or stolen
Securitization Bond shall constitute an original additional contractual
obligation of the Issuer, whether or not the mutilated, destroyed, lost or
stolen Securitization Bond shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securitization Bonds duly issued
hereunder.

         (c) The provisions of this Section 2.06 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Securitization Bonds.

         SECTION 2.07 Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Securitization Bond, the Issuer, the
Trustee and any agent of the Issuer or the Trustee may treat the Person in
whose name any Securitization Bond is registered (as of the day of
determination) as the owner of such Securitization Bond for the purpose of
receiving payments of principal of and interest on such Securitization Bond
and for all other purposes whatsoever, whether or not such Securitization
Bond be overdue, and neither the Issuer, the Trustee nor any agent of the
Issuer or the Trustee shall be affected by notice to the contrary.

         SECTION 2.08 Payment of Principal and Interest; Interest on
Overdue Principal; Principal and Interest Rights Preserved. (a) The
Securitization Bonds shall accrue interest as provided in the form of
Securitization Bond attached to the Series Supplement for such
Securitization Bonds, at the applicable Interest Rate specified therein,
and such interest shall be payable on each Payment Date as specified
therein. Any instalment of interest or principal payable on any
Securitization Bond which is punctually paid or duly provided for by the
Issuer on the applicable Payment Date shall be paid to the Person in whose
name such Securitization Bond (or one or more Predecessor Securitization
Bonds) is registered on the Record Date for such Payment Date, in the
manner specified in the related Series Supplement, and if not specified
therein, either (i) by check mailed first-class, postage prepaid to such
Person's address as it appears on the Securitization Bond Register on such
Record Date or (ii) with respect to Securitization Bonds registered on a
Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee,
except for the final instalment of principal payable with respect to such
Securitization Bond on a Payment Date, which shall be payable as provided
in clause (b) below. The funds represented by any such checks or other
amounts returned undelivered shall be held in accordance with Section 3.03.

         (b) The principal of each Securitization Bond of each Series (and,
if applica ble, Class) shall be payable in instalments on each Payment Date
specified in the Expected Amortization Schedule included in the form of
Securitization Bond attached to the Series Supplement for such
Securitization Bonds, but only to the extent that moneys are available for
such payment pursuant to Section 8.02. Failure to pay in accordance with
such Expected Amortization Schedule because moneys are not so available
pursuant to Section 8.02 to make such payments shall not constitute a
Default or Event of Default under this Indenture. Notwith standing the
foregoing, the entire Outstanding principal amount of the Securitization
Bonds of any Series or Class shall be due and payable, if not previously
paid, either: (i) on the Final Maturity Date therefor, (ii) on the date on
which the Securitization Bonds of all Series have been declared immediately
due and payable in accordance with Section 5.02 or (iii) on the Redemp tion
Date, if any, therefor. The Trustee shall notify the Person in whose name a
Securitization Bond is registered, and any other Person required under the
relevant Series Supplement, at the close of business on the Record Date
preceding the Payment Date on which the Issuer expects that the final
instalment of principal of and interest on such Securitization Bond will be
paid. Such notice shall be mailed no later than ten (10) days prior to such
<PAGE>
final Payment Date and shall specify that such final instalment of
principal will be payable only upon presentation and surrender of such
Securitization Bond and shall specify the place where such Securitization
Bond may be presented and surrendered for payment of such instalment,
which, so long as any Securitization Bonds are listed on the Luxembourg
Stock Exchange, shall include the office of the paying agent in Luxembourg
appointed pursuant to Section 3.02(b). The Trustee shall also arrange for
such notice to be published in an Authorized Newspaper, not later than the
fifth day of the month of the expected payment of such final instalment.
Notices in connection with redemptions of Securitization Bonds also shall
be mailed to Securitization Bondholders as provided in Section 10.03.

         (c) If the Issuer defaults in a payment of interest on the
Securitization Bonds of any Series, or in a default of any amount payable
to any Swap Counterparty, the Issuer shall pay defaulted interest, plus
interest on such defaulted interest at the applicable Interest Rate in any
lawful manner (subject to the availability of such amounts in the related
Class Subaccount, in the case of interest owed with respect to any
Securitization Bonds which have a floating rate of interest). The Issuer
may pay such defaulted interest to the Persons who are Securitization
Bondholders and to any Swap Counterparty, as applicable, at the rate
specified in the related Series Supplement or Interest Rate Swap Agreement,
respectively, on a subsequent special record date, which date shall be at
least five Business Days prior to the payment date. The Issuer shall fix or
cause to be fixed any such special record date and payment date, and, at
least fifteen (15) days before any such special record date, the Issuer
shall mail to each affected Securitization Bondholder a notice that states
the special record date, the payment date and the amount of defaulted
interest to be paid.

         SECTION 2.09 Cancellation. All Securitization Bonds surrendered
for payment, registration of transfer, exchange or redemption shall, if
surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly canceled by the Trustee. The Issuer may at
any time deliver to the Trustee for cancellation any Securitization Bonds
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Securitization Bonds so
delivered shall be promptly canceled by the Trustee. No Securitization
Bonds shall be authenticated in lieu of or in exchange for any
Securitization Bonds canceled as provided in this Section 2.09, except as
expressly permitted by this Indenture. All canceled Securitization Bonds
may be held or disposed of by the Trustee in accordance with its standard
retention or disposal policy as in effect at the time unless the Issuer
shall direct by an Issuer Order that they be destroyed or returned to it;
provided that such Issuer Order is timely and the Securitization Bonds have
not been previously disposed of by the Trustee.

         SECTION 2.10 Amount; Authentication and Delivery of Securitization
Bonds. (a) The aggregate principal amount of Securitization Bonds that may
be authenticated and delivered under this Indenture shall not exceed
$468,592,000 plus the amount of any Refunding Issuance. The Issuer may
issue Securitization Bonds of a new Series as a Financing Issuance or a
Refunding Issuance.

         (b) Securitization Bonds of a new Series may from time to time be
executed by a Manager on behalf of the Issuer and delivered to the Trustee
for authentication and thereupon the same shall be authenticated and
delivered by the Trustee upon Issuer Request and upon delivery by the
Issuer, at the Issuer's expense, to the Trustee of the following:

               (i) Trust Action. An Issuer Order authorizing and directing
      the authentication and delivery of the Securitization Bonds by the
      Trustee and specifying the principal amount of Securitization Bonds
      to be authenticated.

               (ii) Authorizing Certificate. A certified resolution of the
      Managers authorizing the execution and delivery of the Series
      Supplement for the Securitization Bonds applied for and the
      execution, authentication and delivery of such Securitization Bonds.

               (iii) Series Supplement. A Series Supplement for the Series
      of Securitization Bonds being issued, which shall set forth the
      provisions and form of the Securitization Bonds of such Series (and,
      if applicable, each Class thereof).

<PAGE>
               (iv) Certificates of the Issuer and the Seller.

                    (A) An Issuer Officer's Certificate dated as of the
            Series Issuance Date, stating:

                        (1) that no Default has occurred and is continuing
                  under this Indenture and that the issuance of the
                  Securitization Bonds being issued will not result in any
                  Default;

                        (2) that the Issuer has not assigned any interest
                  or participation in the Collateral except for the Grant
                  contained in this Indenture; that the Issuer has the
                  power and authority to Grant the Collat eral to the
                  Trustee as security hereunder; and that the Issuer,
                  subject to the terms of this Indenture, has Granted to
                  the Trustee a perfected security interest in all right,
                  title and interest in, to and under the Collateral free
                  and clear of any Lien, except the Lien of this Indenture;

                        (3) that the Issuer has appointed the firm of
                  independ ent certified public accountants as contemplated
                  in Section 8.05;

                        (4) that attached thereto are duly executed, true
                  and complete copies of the Sale Agreement and the
                  Servicing Agreement;

                        (5) that all Delaware UCC and Michigan UCC financ
                  ing statements with respect to the Collateral which are
                  required to be filed by the terms of the Sale Agreement,
                  the Servicing Agreement or this Indenture will be filed
                  as required; and

                        (6) that all conditions precedent provided in this
                  Inden ture relating to the authentication and delivery of
                  the Securitization Bonds have been complied with.

                    (B) An Officer's Certificate from the Seller, dated as
            of the Series Issuance Date, to the effect that, in the case of
            the Securitization Property to be transferred to the Issuer on
            such date, immediately prior to the conveyance thereof to the
            Issuer pursuant to the Sale Agreement:

                        (1) the Seller was the sole owner of such
                  Securitization Property and such ownership interest was
                  perfected; such Securitization Property will be validly
                  transferred and sold to the Issuer free and clear of all
                  Liens (other than Liens created by the Issuer pursuant to
                  this Indenture) and such transfer will be perfected; the
                  Seller has the power and authority to own, sell and
                  assign such Securitization Property to the Issuer; the
                  Seller has duly authorized such sale and assignment to
                  the Issuer; and the Seller has its chief executive office
                  in the State of Michigan; and

                        (2) the attached copy of the Financing Order
                  creating such Securitization Property is true and correct
                  and is in full force and effect; and
<PAGE>

                    (v) Issuer Opinion of Counsel. An Issuer Opinion of
         Counsel, portions of which may be delivered by counsel for the
         Issuer and portions of which may be delivered by counsel for the
         Seller and/or the Servicer, dated as of the Series Issuance Date,
         subject to customary qualifications, to the collective effect,
         subject to customary qualifications and exceptions that:

                                    (A) the Issuer has the power and
                  authority to execute and deliver the Series Supplement
                  and this Indenture and to issue the Securitization Bonds
                  being issued, each of the Series Supplement and this
                  Indenture and such Securitization Bonds have been duly
                  authorized, executed and delivered, and the Issuer is
                  duly organized, is validly existing as a limited
                  liability company and in good standing under the laws of
                  the jurisdiction of its organization and is in good
                  standing in any jurisdiction where it is required to be
                  qualified;

                                    (B) no authorization, approval or
                  consent of any governmental body is required for the
                  valid issuance, authentication or delivery of such
                  Securiti zation Bonds, except for any such authorization,
                  approval or consent as has already been obtained and such
                  registrations as are required under the Blue Sky and
                  securities laws of any State;

                                    (C) the Securitization Bonds being
                  issued, when executed, and authenticated in accordance
                  with the provisions of this Indenture and delivered, will
                  constitute valid and binding obligations of the Issuer
                  entitled to the benefits of this Indenture and the
                  related Series Supplement;

                                    (D) the Financing Order is final and
                  non-appealable;

                                    (E) this Indenture (including the
                  related Series Supplement), the Sale Agreement and the
                  Servicing Agreement have been duly authorized, executed
                  and delivered by the Issuer and constitute the legal,
                  valid and binding agreements of the Issuer, enforceable
                  against the Issuer in accordance with their respective
                  terms except as such enforceability may be subject to
                  bankruptcy, insolvency, reorganization and other similar
                  laws affecting the rights of creditors generally and
                  general principles of equity (regardless of whether such
                  enforceability is considered in a proceeding in equity or
                  at law);

                                    (F) the Sale Agreement has been duly
                  authorized, executed and delivered by the Seller and
                  constitutes the legal, valid and binding agreement of the
                  Seller, enforceable against the Seller in accordance with
                  its terms except as such enforceability may be subject to
                  bankruptcy, insolvency, reorganization and other similar
                  laws affecting the rights of creditors generally and
                  general principles of equity (regardless of whether such
                  enforcement is considered in a proceeding in equity or at
                  law);
<PAGE>

                                     (G) the Servicing Agreement has been
                  duly authorized, exe cuted and delivered by the Servicer
                  and constitutes the legal, valid and binding agreement of
                  the Servicer, enforceable against the Servicer in
                  accordance with its terms except as such enforceability
                  may be subject to bankruptcy, insolvency, reorganization
                  and other similar laws affecting the rights of creditors
                  generally and general principles of equity (regardless of
                  whether such enforcement is considered in a proceeding in
                  equity or at law);

                                    (H)

                                            (1) the provisions of the Sale
                           Agreement together with the Bill of Sale are
                           effective to create, in favor of the Issuer, a
                           valid security interest (as such term is defined
                           in the Michigan UCC) in the Seller's rights in
                           the Securitization Property described in the
                           Bill of Sale, which security interest if
                           characterized as a transfer for security will
                           secure the amount paid by the Issuer for such
                           Transferred Securitization Property; it being
                           noted that the term "security interest" includes
                           both a sale and a transfer for security of an
                           account and no opinion is expressed as to the
                           proper characterization of the transfer of the
                           Transferred Securitization Property by the
                           Seller to the Issuer;

                                            (2) the security interest in favor
                           of the Issuer in the Transferred Securitization
                           Property has been perfected; and

                                            (3) the UCC search reports for
                           the Issuer and for Consumers identifies no
                           person as having filed in the Filing Office a
                           financing statement naming either Consumers
                           Energy Company or Con sumers Funding LLC as
                           debtor and containing a description of
                           collateral sufficient to include the Collateral
                           as of the effective date of the Search Report;
                           and

                                    (I)

                                            (1) this Indenture creates in
                           favor of the Trustee, to secure payment of the
                           Secured Obligations, a valid security interest
                           in the rights of the Issuer in, to and under
                           that portion of the Collateral subject to
                           Article 8 or Article 9 of the Michigan UCC,
                           including the Securitization Property,

                                            (2) upon filing of the related
                           financing statements in accordance with the
                           Michigan UCC and the Delaware UCC, such security
                           interest will be perfected, and

                                            (3) the UCC search reports for
                           the Issuer and for Consumers identifies no
                           person as having filed in the Filing Office a
                           financing statement naming either Consumers
                           Energy Company or Con sumers Funding LLC as
                           debtor and containing a description of
                           collateral sufficient to include the Collateral
                           as of the effective date of the Search Report;

                                    (J) this Indenture has been duly
                  qualified under the Trust Indenture Act and either the
                  Series Supplement for the Securitization Bonds applied
                  for has been duly qualified under the Trust Indenture Act
                  or no such qualification of such Series Supplement is
                  necessary;

<PAGE>
                                    (K)     either

                                            (1) the registration statement
                           covering the Securitiza tion Bonds is effective
                           under the Securities Act of 1933 and, to the
                           best of such counsel's knowledge and
                           information, no stop order suspending the
                           effectiveness of such registration statement has
                           been issued under the Securities Act of 1933 nor
                           have proceedings therefor been instituted or
                           threatened by the Commission or

                                            (2) the Securitization Bonds
                           are exempt from the registration requirements
                           under the Securities Act of 1933; and

                                    (L) the Issuer is not now and,
                  following the issuance of the Securitization Bonds will
                  not be, required to be registered under the Investment
                  Company Act of 1940, as amended.

                           (vi) Accountant's Certificate or Opinion. A
         letter addressed to the Issuer and the Trustee complying with the
         requirements of Section 11.01, of a firm of Independent certified
         public accountants of recognized national reputation to the effect
         that (A) such accountants are Independent with respect to the
         Issuer within the meaning of this Indenture, and are independent
         public accountants within the meaning of the standards of The
         American Institute of Certified Public Accountants, and (B) with
         respect to the Collateral, they have made certain specified
         recalculations of calculations and information provided by the
         Issuer for the purpose of determining that, based on certain
         specified assumptions used in calculating the Securitization
         Charge with respect to the related Transferred Securitization
         Property, as of the Series Issuance Date for such Series, the
         Securitization Charge will be sufficient to pay as of each Payment
         Date taking into account any amounts on deposit in the reserve
         subaccount:

                  (1)  assumed Operating Expenses when incurred, plus

                  (2)  the Overcollateralization Amount for such Series set
                  forth in the Prospectus (as such term is defined in the
                  Underwriting Agreement), plus

                  (3)  interest on the Securitization Bonds at their
                  respective Interest Rates when due as set forth in the
                  Final Prospectus, plus

                  (4)  principal of the Securitization Bonds in accordance
                  with the Expected Amortization Schedule set forth in the
                  Final Prospectus,

         and found such calculations to be mathematically correct.

                           (vii) Required Capital Amount. Evidence
         satisfactory to the Trustee that the Required Capital Amount for
         such Series has been credited to the Capital Subaccount for such
         Series, provided that in the case of the initial Series of
         Securitization Bonds, $100,000 of the Required Capital Amount for
         such Series shall have been deposited to the credit of the Capital
         Reserve Subaccount.

                           (viii) Rating Agency Condition. Written notice
         from each Rating Agency 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.

                           (ix) Bill of Sale. If the issuance of an
         additional Series of Securitiza tion Bonds is a Financing
         Issuance, the Bill of Sale delivered to the Issuer under the Sale
         Agreement with respect to the Securitization Property being
         purchased with the proceeds of such Financing Issuance.
<PAGE>

                           (x) Moneys for Refunding. If the issuance of a
         Series of Securitization Bonds is a Refunding Issuance, the amount
         of money necessary to pay the outstanding principal balance of and
         interest on the Securitization Bonds being refunded to the
         Redemption Date for the Securitization Bonds being refunded upon
         redemption, such money to be deposited into a separate account
         with the Trustee.

                  SECTION 2.11 Book-Entry Securitization Bonds. Unless
otherwise specified in the related Series Supplement, each Series of
Securitization Bonds, upon original issuance, will be issued in the form of
a typewritten Securitization Bond or Securitization Bonds representing the
Book-Entry Securitization Bonds, to be delivered to The Depository Trust
Company, the initial Clearing Agency, by, or on behalf of, the Issuer. Such
Securitization Bond shall initially be registered on the Securitization
Bond Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no Securitization Bond Owner will receive a definitive
Securitization Bond representing such Securitization Bond Owner's interest
in such Securitization Bond, except as provided in Section 2.13. Unless and
until definitive, fully registered Securitization Bonds (the "Definitive
Securitization Bonds") have been issued to Securitization Bondholders
pursuant to Section 2.13:

                  (a) the provisions of this Section 2.11 shall be in full
force and effect;

                  (b) the Securitization Bond Registrar and the Trustee
shall be entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the
Securitization Bonds and the giving of instructions or directions
hereunder) as the sole Holder of the Securitization Bonds, and shall have
no obligation to the Securitization Bond Owners;

                  (c) to the extent that the provisions of this Section
2.11 conflict with any other provisions of this Indenture, the provisions
of this Section shall control;

                  (d) the rights of Securitization Bond Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Securitization Bond Owners
and the Clearing Agency or the Clearing Agency Participants. Pursuant to
the DTC Agreement, unless and until Definitive Securitization Bonds are
issued pursuant to Section 2.13, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive and
transmit payments of principal of and interest on the Securitization Bonds
to such Clearing Agency Participants; and

                  (e) whenever this Indenture requires or permits actions
to be taken based upon instructions or directions of Holders of
Securitization Bonds evidencing a specified percentage of the Outstanding
Amount of the Securitization Bonds or a Series or Class thereof, the
Clearing Agency shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Securitization
Bond Owners or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
Securitization Bonds or such Series or Class and has delivered such
instructions to the Trustee.

                  SECTION 2.12 Notices to Clearing Agency. Whenever a
notice or other communication to the Securitization Bondholders is required
under this Indenture, unless and until Definitive Securitization Bonds
shall have been issued to Securitization Bond Owners pursuant to Section
2.13, the Trustee shall give all such notices and communications specified
herein to be given to Securitization Bondholders to the Clearing Agency,
and shall have no obligation to the Securitization Bond Owners.

                  SECTION 2.13 Definitive Securitization Bonds. (a) If (i)
the Issuer advises the Trustee in writing that the Clearing Agency is no
longer willing or able to properly discharge its responsibilities as
depository with respect to any Series or Class of Securitization Bonds and
the Issuer is unable to locate a qualified successor, (ii) the Issuer, at
its option, advises the Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency with respect to any Series or
Class of Securitization Bonds or (iii) after the occurrence of an Event of
<PAGE>
Default, Securitization Bond Owners representing beneficial interests
aggregating at least a majority of the Outstanding Amount of the
Securitization Bonds of all Series advise the Trustee through the Clearing
Agency in writing that the continuation of a book-entry system through the
Clearing Agency is no longer in the best interests of the Securitization
Bond Owners, then the Clearing Agency shall notify all affected
Securitization Bond Owners and the Trustee of the occurrence of any such
event and of the availability of Definitive Securitization Bonds to
affected Securitization Bond Owners requesting the same. Upon surrender to
the Trustee of the typewritten Securitization Bond or Securitization Bonds
representing the Book-Entry Securitiza tion Bonds by the Clearing Agency,
accompanied by registration instructions, a Manager on behalf of the Issuer
shall execute and the Trustee shall authenticate the Definitive
Securitization Bonds upon receipt of an Issuer Order registered in such
names and in such denominations in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Securitization Bond Registrar or
the Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Any Definitive Securitization Bonds listed on the Luxembourg
Stock Exchange shall be made available to the Securitization Bond Owners
through the office of the transfer agent appointed pursuant to Section
3.02(b). Upon the issuance of Definitive Securitization Bonds, the Trustee
shall recognize the Holders of the Definitive Securitization Bonds as
Securitization Bondholders.

                  (b) Definitive Securitization Bonds will be transferable
and exchangeable at the offices of the Securitization Bond Registrar or,
with respect to any Securitization Bonds listed on the Luxembourg Stock
Exchange, at the offices of the transfer agent appointed pursuant to
Section 3.02(b). With respect to any transfer of such listed Securitization
Bonds, the new Definitive Securitization Bonds registered in the names
specified by the transferee and the original transferor shall be available
at the offices of such transfer agent.


                                ARTICLE III

                                 Covenants

                  SECTION 3.01 Payment of Principal and Interest. The
Issuer will duly and punctually pay the principal of and interest on the
Securitization Bonds in accordance with the terms of the Securitization
Bonds and this Indenture; provided that except on the Final Maturity Date
or the Redemption Date for a Series or Class of Securitization Bonds or
upon the accelera tion of the Securitization Bonds pursuant to Section
5.02, the Issuer shall only be obligated to pay the principal of such
Securitization Bonds on each Payment Date therefor to the extent moneys are
available for such payment pursuant to Section 8.02. Amounts properly
withheld under the Code by any Person from a payment to any Securitization
Bondholder of interest or principal shall be considered as having been paid
by the Issuer to such Securitization Bondholder for all purposes of this
Indenture.

                  SECTION 3.02 Maintenance of Office or Agency. (a) The
Issuer will maintain in the Borough of Manhattan, the City of New York, an
office or agency where Securitization Bonds may be surrendered for
registration of transfer or exchange, and where notices and demands to or
upon the Issuer in respect of the Securitization Bonds and this Indenture
may be served. The Issuer hereby initially appoints the Trustee to serve as
its agent for the foregoing purposes. The Issuer will give prompt written
notice to the Trustee and any agent appointed pursuant to clause (b) below
of the location and identity, and of any change in the location or
identity, of any such office or agency. If at any time the Issuer shall
fail to maintain any such office or agency or shall fail to furnish the
Trustee and each such agent with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office,
and the Issuer hereby appoints the Trustee as its agent to receive all such
surrenders, notices and demands.

<PAGE>
                  (b) To the extent any of the Securitization Bonds are
listed on the Luxem bourg Stock Exchange and the rules of such exchange so
require, (i) the Issuer will maintain in Luxembourg (A) an office and a
transfer agent where Securitization Bonds may be surrendered for
registration of transfer or exchange, (B) an office and a listing agent
where notices and demands to or upon the Issuer in respect of the
Securitization Bonds and this Indenture may be served, and (C) an office
and a paying agent where payments in respect of the Securitization Bonds
may be made and (ii) any reference in this Indenture to the office or
agency of the Issuer referenced in Section 3.02(a) or 3.02(b) shall also
refer to such offices, and the transfer, listing and paying agents, of the
Issuer in Luxembourg, as applicable. The Issuer shall give the Trustee and
any other agent appointed under this Section 3.02(b) prompt written notice
of the location and identity, and of any change in the location or
identity, of any such office or agency.

                  SECTION 3.03 Money for Payments To Be Held in Trust. (a)
As provided in Section 8.02(a), all payments of principal of and interest
on the Securitization Bonds that are to be made from amounts withdrawn from
the Collection Account pursuant to Section 8.02(g), or Section 4.03 shall
be made on behalf of the Issuer by the Trustee or by another Paying Agent,
and no amounts so withdrawn from the Collection Account for payments of
Securitization Bonds shall be paid over to the Issuer except as provided in
this Section 3.03 and in Section 8.02.

                  (b) The Issuer shall cause each Paying Agent other than
the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee (and if the Trustee acts as
Paying Agent, it hereby so agrees), subject to the provisions of this
Section 3.03, that such Paying Agent will:

                           (i) hold all sums held by it for the payment of
         principal of or interest on the Securitization Bonds in trust for
         the benefit of the Persons entitled thereto until such sums shall
         be paid to such Persons or otherwise disposed of as herein
         provided and pay such sums to such Persons as herein provided;

                           (ii) give the Trustee notice of any Default by
         the Issuer (or any other obligor upon the Securitization Bonds) of
         which the Paying Agent has actual knowledge in the making of any
         payment required to be made with respect to the Securitization
         Bonds;

                           (iii) at any time during the continuance of any
         such Default, upon the written request of the Trustee, forthwith
         pay to the Trustee all sums so held in trust by such Paying Agent;

                           (iv) immediately resign as a Paying Agent and
         forthwith pay to the Trustee all sums held by the Paying Agent in
         trust for the payment of Securitization Bonds if at any time the
         Paying Agent ceases to meet the standards required to be met by a
         Paying Agent at the time of its appointment; and

                           (v) comply with all requirements of the Code
         with respect to the withholding from any payments made by it on
         any Securitization Bonds of any applicable withholding taxes
         imposed thereon and with respect to any applicable reporting
         require ments in connection therewith.

                  (c) The Issuer may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for any other
purpose, by Issuer Order direct any Paying Agent to pay to the Trustee all
sums held in trust by such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect
to such money.

<PAGE>
                  (d) Subject to applicable laws with respect to escheat of
funds or other applicable abandoned property laws, any money held by the
Trustee or any Paying Agent in trust for the payment of any amount of
principal of or interest on any Securitization Bond and remaining unclaimed
for two years after such amount has become due and payable shall be
discharged from such trust and be paid to the Issuer; and the Holder of
such Securitization Bond shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof (but only to the
extent of the amounts so paid to the Issuer), and all liability of the
Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general
circulation in the City of New York, and in an Authorized Newspaper, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than thirty (30) days from the date of such
publication, any unclaimed balance of such money then remaining will be
repaid to the Issuer. The Trustee may also adopt and employ, at the expense
of the Issuer, any other reason able means of notification of such
repayment (including mailing notice of such repayment to Holders whose
Securitization Bonds have been called but have not been surrendered for
redemption or whose right to or interest in moneys due and payable but not
claimed is determina ble from the records of the Trustee or of any Paying
Agent, at the last address of record for each such Holder).

                  SECTION 3.04 Existence. Subject to Section 3.10, the
Issuer shall keep in full effect its existence, rights and franchises as a
statutory limited liability company under the laws of the State of Delaware
(unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of
America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will
obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the
validity and enforceability of this Indenture, the Securitization Bonds,
the Collateral and each other instrument or agreement included therein.

                  SECTION 3.05 Protection of Collateral. (a) The Issuer
shall from time to time execute and deliver all such supplements and
amendments hereto and all such filings, financing statements, continuation
statements, instruments of further assurance and other instruments, and
shall take such other action necessary or advisable to:

                           (i) maintain and preserve the Grant, Lien and
         security interest (and the priority thereof) of this Indenture or
         carry out more effectively the purposes hereof;

                           (ii) perfect, publish notice of or protect the
         validity of any Grant made or to be made by this Indenture;

                           (iii) enforce any of the Collateral, including
         any Interest Rate Swap Agreement;

                           (iv) preserve and defend title to the Collateral
         and the rights of the Trustee and the Securitization Bondholders
         in the Collateral against the claims of all Persons and parties;
         or
<PAGE>

                           (v) pay any and all taxes levied or assessed
         upon all or any part of the Collateral.

                  (b) The Issuer hereby designates the Trustee its agent
and attorney-in-fact to execute any filing with the MPSC, financing
statement, continuation statement or other instru ment required by the
Trustee pursuant to this Section 3.05.

                  SECTION 3.06 Opinions as to Collateral. (a) On or before
March 31 in each calendar year, while any Series is outstanding, commencing
March 31, 2002, the Issuer shall furnish to the Trustee an Issuer Opinion
of Counsel either (i) stating that, in the opinion of such counsel, such
action has been taken with respect to the execution and filing of any
filings pursuant to the Michigan UCC and the Delaware UCC of financing
statements and continuation statements as is necessary to maintain the Lien
and security interest, and the perfection thereof, created by this
Indenture and reciting the details of such action or (ii) stating that in
the opinion of such counsel no such action is necessary to maintain such
Grant, Lien and security interest, and the perfection thereof. Such Issuer
Opinion of Counsel shall also describe the execution and filing of any
filings pursuant to the Michigan UCC and the Delaware UCC of financing
statements and continuation statements that will, in the opinion of such
counsel, be required to maintain the Grant, Lien and security interest of
this Indenture until March 31 in the following calendar year.

                  (b) Prior to the effectiveness of any amendment to the
Sale Agreement, the Servicing Agreement or this Indenture, the Issuer shall
furnish to the Trustee an Issuer Opinion of Counsel either (i) stating
that, in the opinion of such counsel, all filings, including filings
pursuant to the Michigan UCC and the Delaware UCC, have been executed and
filed that are necessary fully to preserve and protect the interest of the
Issuer and the Trustee in the Transferred Securitization Property and the
proceeds thereof, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (ii) stating
that, in the opinion of such counsel, no such action shall be necessary to
preserve and protect such interest.

                  SECTION 3.07 Performance of Obligations. (a) The Issuer
(i) shall diligently pursue any and all actions to enforce its rights under
each instrument or agreement included in the Collateral and (ii) shall not
take any action and will use its best efforts not to permit any action to
be taken by others that would release any Person from any of such Person's
covenants or obligations under any such instrument or agreement or that
would result in the amendment, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness of, any such
instrument or agreement, except, in each case, as expressly provided in
this Indenture, the Sale Agreement, the Servicing Agreement, any Interest
Rate Swap Agree ment, the Intercreditor Agreement or any other Basic
Document.

                  (b) The Issuer may contract with other Persons to assist
it in performing its duties under this Indenture, and any performance of
such duties by a Person identified to the Trustee in an Issuer Officer's
Certificate shall be deemed to be action taken by the Issuer. Initially,
the Issuer has contracted with the Administrator to assist the Issuer in
performing its duties under this Indenture.

                  (c) The Issuer shall punctually perform and observe in
all material respects all of its obligations and agreements contained in
the Sale Agreement, the Servicing Agreement, the Intercreditor Agreement,
any Interest Rate Swap Agreement and in all other instruments and
agreements included in the Collateral.

                  SECTION 3.08 Negative Covenants. The Issuer shall not:

                  (a) except as expressly permitted by this Indenture, the
Sale Agreement, the Servicing Agreement, any Interest Rate Swap Agreement,
the Intercreditor Agreement or any other Basic Document, sell, transfer,
exchange or otherwise dispose of any of the Collateral, unless directed to
do so by the Trustee in accordance with Article V;
<PAGE>

                  (b) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Securitization Bonds
(other than amounts properly withheld from such payments under the Code or
pursuant to any Interest Rate Swap Agreement) or assert any claim against
any present or former Securitization Bondholder by reason of the payment of
taxes levied or assessed upon the Issuer or any part of the Collateral;

                  (c) (i) permit the validity or effectiveness of this
Indenture to be impaired, or permit the Lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or permit
any Person to be released from any covenants or obligations with respect to
the Securitization Bonds under this Indenture except as may be expressly
permitted hereby, (ii) permit any Lien (other than the Lien created by this
Indenture) to be created on or extend to or otherwise arise upon or burden
the Collateral or any part thereof, any interest therein or the proceeds
thereof or (iii) permit the Lien of this Indenture not to constitute a
continuing valid first priority security interest in the Collateral; or

                  (d) take any action with respect to which notice is
required to be given to the Rating Agencies in order to satisfy the Rating
Agency Condition if the Issuer or the Trustee has received notice from any
Rating Agency that such action would result in a reduction or with drawal
of the then current rating by such Rating Agency of any Outstanding Series
or Class of Securitization Bonds.

                  SECTION 03.09 Annual Statement as to Compliance. The
Issuer will deliver to the Trustee, within 120 days after the end of each
fiscal year of the Issuer (commencing with the fiscal year 2001), an Issuer
Officer's Certificate stating, as to the Manager signing such Issuer
Officer's Certificate, that

                  (a) a review of the activities of the Issuer during such
year (or relevant portion thereof) and of performance under this Indenture
has been made under such Manager's supervi sion; and

                  (b) to the best of such Manager's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such calendar year (or relevant portion
thereof), or, if there has been a default in complying with any such
condition or covenant, describing each such default and the nature and
status thereof.

                  SECTION 03.10 Issuer May Consolidate, etc., Only on
Certain Terms. The Issuer shall not consolidate or merge with or into any
other Person or sell substantially all of its assets to any other Person or
dissolve, unless:

                  (a) the Person (if other than the Issuer) formed by or
surviving such consoli dation or merger or to whom substantially all of
such assets are sold shall be a Person organized and existing under the
laws of the United States of America or any State and shall expressly
assume by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment
of the principal of and interest on all Securitization Bonds and the
performance or observance of every agreement and covenant of this Indenture
on the part of the Issuer to be performed or observed, all as provided
herein and in the applicable Series Supplement or Series Supplements;

<PAGE>
                  (b) the Person (if other than the Issuer) formed by or
surviving such consoli dation or merger or to whom substantially all of
such assets are sold shall expressly assume all obligations and succeed to
all rights of the Issuer under the Sale Agreement, the Administration
Agreement, the Servicing Agreement, the Intercreditor Agreement and any
Interest Rate Swap Agreement pursuant to an assignment and assumption
agreement executed and delivered to the Trustee, in form satisfactory to
the Trustee;

                  (c) immediately after giving effect to such
consolidation, merger or sale, no Default or Event of Default shall have
occurred and be continuing;

                  (d) the Rating Agency Condition shall have been satisfied
with respect to such consolidation or merger or sale;

                  (e) the Issuer shall have received an Issuer Opinion of
Counsel (and shall have delivered copies thereof to the Trustee)
substantially to the effect that such consolidation, merger or sale (i)
will not have any material adverse tax consequence to the Issuer or any
Securitization Bondholder, (ii) complies in all material respects with this
Indenture and all of the conditions precedent herein relating to such
transaction and (iii) will result in the Trustee maintaining a continuing
valid perfected security interest in the Collateral;

                  (f) neither the Securitization Property nor the Financing
Order nor the rights of the Seller, the Servicer or the Issuer under the
Customer Choice Act or the Financing Order shall be impaired thereby; and

                  (g) any action as is necessary to maintain the Lien
created by this Indenture shall have been taken.

                  SECTION 3.11 Successor or Transferee. (a) Upon any
consolidation or merger of the Issuer in accordance with Section 3.10, the
Person formed by or surviving such consolidation or merger (if other than
the Issuer) shall succeed to, and be substituted for, and may exercise
every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.

                  (b) Upon any sale by the Issuer of substantially all of
its assets in a sale which complies with Section 3.10, Consumers Funding
LLC will be released from every covenant and agreement of this Indenture to
be observed or performed on the part of the Issuer with respect to the
Securitization Bonds and from every covenant and agreement of the Sale
Agreement, the Administration Agreement, the Servicing Agreement and any
Interest Rate Swap Agreement to be observed or performed on the part of the
Issuer.
<PAGE>

                  SECTION 3.12 No Other Business. The Issuer shall not
engage in any business other than purchasing and owning Securitization
Property, issuing Securitization Bonds from time to time, pledging its
interest in the Collateral to the Trustee under this Indenture in order to
secure the Securitization Bonds, entering into the Basic Documents and
performing its obligations thereunder and performing activities that are
necessary, suitable or convenient to accomplish these purposes or are
incidental thereto and other than as contemplated by the Basic Documents.

                  SECTION 3.13 No Borrowing. The Issuer shall not issue,
incur, assume, guarantee or otherwise become liable, directly or
indirectly, for any indebtedness except for the Securitization Bonds and
except as contemplated by the Basic Documents.

                  SECTION 3.14 Guarantees, Loans, Advances and Other
Liabilities. Except as contemplated by the Basic Documents, Issuer shall
not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any
stock, obligations, assets or securities of, or any other interest in, or
make any capital contribution to, any other Person, other than any Eligible
Investments.

                  SECTION 3.15 Capital Expenditures. The Issuer shall not
make any expenditure (by long-term or operating lease or otherwise) for
capital assets (either realty or personalty) other than Securitization
Property purchased from the Seller pursuant to, and in accordance with, the
Sale Agreement.

                  SECTION 3.16 Restricted Payments. The Issuer shall not,
directly or indirectly, (a) pay any dividend or make any distribution (by
reduction of capital or otherwise), whether in cash, property, securities
or a combination thereof, to any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest in, or
owner ship security of, the Issuer, (b) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or
security or (c) set aside or otherwise segregate any amounts for any such
purpose; provided, however, that if no Event of Default shall have occurred
and be continuing or would otherwise result from such payment, the Issuer
may make, or cause to be made, any such distributions to any owner of a
beneficial interest in the Issuer or otherwise with respect to any
ownership or equity interest or security in or of the Issuer using funds
either distributed to the Issuer pursuant to Section 8.02(g) or which are
not otherwise subject to the Lien of this Indenture, to the extent that
such distributions would not cause the book value of the remaining equity
in the Issuer to decline below 0.5% of the original principal amount of all
Series of Securitization Bonds which remain outstanding. The Issuer will
not, directly or indirectly, make payments to or distributions from the
Collection Account except in accordance with this Indenture and the Basic
Documents.

                  SECTION 3.17 Notice of Events of Default. The Issuer
agrees to deliver to the Trustee, the Rating Agencies and (to the extent
the rules and regulations of the Luxembourg Stock Exchange so require) any
agent in Luxembourg appointed pursuant to Section 3.02(b) written notice in
the form of an Issuer Officer's Certificate of any Default or Event of
Default hereunder or under any of the Basic Documents, its status and what
action the Issuer is taking or proposes to take with respect thereto,
within five Business Days after the occurrence thereof.

                  SECTION 3.18 Inspection. The Issuer agrees that, on
reasonable prior notice, it will permit any representative of the Trustee,
during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies
and extracts therefrom, to cause such books to be audited annually by
Independent certified public accountants, and to discuss the Issuer's
affairs, finances and accounts with the Issuer's officers, employees and
Independent certified public accountants, all at such reasonable times and
as often as may be reasonably requested. The Trustee shall and shall cause
its representa tives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable
applications for confidential treatment are unavailing) and except to the
extent that the Trustee may reasonably determine that such disclosure is
consistent with its obligations hereunder.
<PAGE>

                  SECTION 3.19 Sale Agreement, Servicing Agreement and
Swap Agree ment Covenants. (a) The Issuer agrees to take all such lawful
actions to enforce its rights under the Sale Agreement, the Servicing
Agreement and any Interest Rate Swap Agreement and to compel or secure the
performance and observance by the Seller, the Servicer and any Swap
Counterparty, of each of their obligations to the Issuer under or in
connection with the Sale Agreement, the Servicing Agreement and any
Interest Rate Swap Agreement, respectively, in accordance with the terms
thereof. So long as no Event of Default occurs and is continuing, but
subject to Section 3.19(e), the Issuer may exercise any and all rights,
remedies, powers and privileges lawfully available to the Issuer under or
in connection with the Sale Agreement, the Servicing Agreement and any
Interest Rate Swap Agreement.

                  (b) If an Event of Default occurs and is continuing, the
Trustee may, and, at the direction (which direction shall be in writing or
by telephone (confirmed in writing promptly thereafter)) of (i) with
respect to the Sale Agreement or the Servicing Agreement, the Holders of a
majority of the Outstanding Amount of the Securitization Bonds of all
Series or (ii) with respect to any Interest Rate Swap Agreement, the
Holders of that percentage of the Outstanding Amount of the Securitization
Bonds of the related Class specified in the related Series Supple ment,
shall, exercise all right, remedies, powers, privileges and claims of the
Issuer against the Seller, the Servicer or any Swap Counterparty under or
in connection with the Sale Agreement, the Servicing Agreement and any
Interest Rate Swap Agreement, respectively, including the right or power to
take any action to compel or secure performance or observance by the
Seller, the Servicer or any Swap Counterparty of each of their obligations
to the Issuer thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Sale Agreement, the
Servicing Agreement and any Interest Rate Swap Agreement, and any right of
the Issuer to take such action shall be suspended.

                  (c) With the consent of the Trustee, the Sale Agreement,
the Intercreditor Agreement and the Servicing Agreement may be amended, so
long as the Rating Agency Condition is satisfied in connection therewith,
at any time and from time to time, without the consent of the
Securitization Bondholders, or the counterparty under any Interest Rate
Swap Agreement. However, such amendment may not adversely affect in any
material respect the interest of any Securitization Bondholder or any
counterparty under any Interest Rate Swap Agreement without the consent of
the Holders of a majority of the Outstanding Amount of the Securitization
Bonds of each Series or Class, and each such counterparty, materially and
adversely affected thereby. Further, with the consent of the Trustee and
the related counterparty under any Interest Rate Swap Agreement, any
Interest Rate Swap Agreement may be amended, at any time and from time to
time, so long as the Rating Agency Condition is satisfied in connection
therewith. However, such amendment may not adversely affect in any material
respect the interest of any Securitization Bondholder or counterparty under
any Interest Rate Swap Agreement without the consent of the Holders of a
majority of the Outstanding Amount of the Securitization Bonds of each
Series or Class and each such counterparty materially and adversely
affected thereby.

                  (d) If the Issuer, the Seller or the Servicer proposes to
amend, modify, waive, supplement, terminate or surrender, or agree to any
amendment, modification, waiver, supple ment, termination, or surrender of,
the terms of the Sale Agreement, the Servicing Agreement, the Intercreditor
Agreement or any Interest Rate Swap Agreement, or waive timely performance
or observance thereunder by the Seller, the Servicer or any Swap
Counterparty under the Sale Agreement, the Servicing Agreement, the
Intercreditor Agreement or any Interest Rate Swap Agreement, respectively,
in each case in such a way as would materially and adversely affect the
interests of any Class of any Series of Securitization Bondholders or the
counterparty under any Interest Rate Swap Agreement, the Issuer shall first
notify the Rating Agencies of the proposed amendment, modification,
termination or surrender. Upon receiving notification regarding whether the
Rating Agency Condition has been satisfied, the Issuer shall notify the
Trustee, and the Trustee shall notify the Securitization Bondholders and
each counterparty under any Interest Rate Swap Agreement, of the proposal
and whether the Rating Agency Condition has been satisfied with respect
thereto. With respect to any such proposed action related to the Sale
Agreement, the Intercreditor Agreement and the Servicing Agreement, the
Trustee shall consent to such proposed action only (i) with the consent of
the Holders of a majority of the Outstanding Amount of the Securitization
Bonds of each Class of each Series, and each counterparty under any
Interest Rate Swap Agreement, materially and adversely affected thereby and
(ii) upon satisfaction of the Rating Agency Condition. With respect to any
such proposed action related to any Interest Rate Swap Agreement, the
Trustee shall consent to such proposed action only (y) with the consent of
the Holders of a majority of the Outstanding Amount of the Securitization
Bonds of the related Class, and each counterparty under any Interest Rate
Swap Agreement, materially and adversely affected thereby and (z) upon
satisfaction of the Rating Agency Condition. If any such amendment,
modification, supplement or waiver shall be so consented to by the Trustee
or such Holders, the Issuer agrees to execute and deliver, in its own name
and at its own expense, such agreements, instruments, consents and other
documents as shall be necessary or appropriate in the circumstances. For so
long as any of the Securitization Bonds are listed on the Luxembourg Stock
Exchange and the rules of that exchange so require, the Issuer will publish
notice of such proposed action in an Authorized Newspaper promptly
following its effectiveness.

<PAGE>
                  (e) If the Issuer or the Servicer proposes to amend,
modify, waive, supple ment, terminate or surrender in any material respect,
or to agree to any material amendment, modification, waiver, supplement,
termination or surrender of, the Securitization Charge Adjustment Process,
the Issuer shall notify the Trustee and the Trustee shall notify
Securitization Bondholders of such proposal and the Trustee shall consent
thereto only with the consent of the Holders a majority of the Outstanding
Amount of the Securitization Bonds of each Series materially and adversely
affected thereby and only if the Rating Agency Condition has been satisfied
with respect thereto.

                  (f) Promptly following a default by either the Seller,
the Servicer or any Swap Counterparty under the Sale Agreement, the
Servicing Agreement or any Interest Rate Swap Agreement, respectively, and
at the Issuer's expense, the Issuer agrees to take all such lawful actions
as the Trustee may request to compel or secure the performance and
observance by the Seller, the Servicer or any Swap Counterparty, as
applicable, of each of their obligations to the Issuer under or in
connection with the Sale Agreement, the Servicing Agreement or any Interest
Rate Swap Agreement in accordance with the terms thereof, and to exercise
any and all rights, remedies, powers and privileges lawfully available to
the Issuer under or in connection with the Sale Agreement, the Servicing
Agreement or any Interest Rate Swap Agreement, respectively, to the extent
and in the manner directed by the Trustee, including the transmission of
notices of default on the part of the Seller, the Servicer or any Swap
Counterparty thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Seller, the
Servicer or any Swap Counterparty of each of their respective obligations
under the Sale Agreement, the Servicing Agreement and any Interest Rate
Swap Agreement.

                  (g) If the Issuer shall have knowledge of the occurrence
of a Servicer Default under the Servicing Agreement or an event of default,
termination event or downgrade event under any Interest Rate Swap
Agreement, the Issuer shall promptly give written notice thereof to the
Trustee and the Rating Agencies, and shall specify in such notice the
action, if any, the Issuer is taking with respect to such default or event.

                  (h) If a Servicer Default shall arise from the failure of
the Servicer to perform any of its duties or obligations under the
Servicing Agreement with respect to the Securitization Property or the
Securitization Charge, the Issuer shall take all reasonable steps available
to it to remedy such failure. The Issuer shall not take any action to
terminate the Servicer's rights and powers under the Servicing Agreement
following a Servicer Default without the prior written consent of the
Trustee and of the Holders of a majority of the Outstanding Amount of the
Securitization Bonds of all Series and unless such termination is permitted
under the Intercreditor Agreement.

                  (i) As promptly as possible after the giving of notice of
termination to the Servicer and the Rating Agencies of the Servicer's
rights and powers pursuant to Section 6.01 of the Servicing Agreement, the
Trustee, with the consent of the Holders of Securitization Bonds evidencing
not less than a majority of the Outstanding Amount of the Securitization
Bonds of all Series and subject to the terms of the Intercreditor
Agreement, may appoint a successor Servicer (the "Successor Servicer"), and
such Successor Servicer shall accept its appointment by a written
assumption in a form acceptable to the Issuer and the Trustee. A person
shall qualify as a Successor Servicer only if such Person satisfies the
requirements of Section 6.04 of the Servicing Agreement. In connection with
any such appointment, the Issuer may make such arrangements for the
compensation of such Successor Servicer as it and such Successor Servicer
shall agree, subject to the limitations set forth below and in the
Servicing Agreement and the terms of the Intercreditor Agreement, and in
accordance with Section 6.04 of the Servicing Agreement, the Issuer shall
enter into an agreement with such Successor Servicer for the servicing of
the Securitization Property (such agreement to be in form and substance
satisfactory to the Trustee).

                  (j) Upon termination of the Servicer's rights and powers
pursuant to the Servicing Agreement, the Trustee shall promptly notify the
Issuer, the Securitization Bondhold ers and the Rating Agencies of such
termination. As soon as a Successor Servicer is appointed, the Issuer shall
notify the Trustee, the Securitization Bondholders and the Rating Agencies
of such appointment, specifying in such notice the name and address of such
Successor Servicer.

<PAGE>
                  (k) The Issuer shall not take any action to terminate or
assign the Swap Counterparty's rights and powers under any Interest Rate
Swap Agreement or replace any Swap Counterparty following an event of
default, termination event or downgrade event under any Interest Rate Swap
Agreement without (i) the prior written consent of the Trustee and of the
Holders of that percentage of the Outstanding Amount of the Securitization
Bonds, if any such consent is required under the related Series Supplement,
of the related Series and Class, if any, specified in the related Series
Supplement, and (ii) satisfying any other requirements set forth in the
related Series Supplement and Interest Rate Swap Agreement.

                  (l) Upon termination or assignment of any Swap
Counterparty's rights and powers, pursuant to any Interest Rate Swap
Agreement, the Trustee shall promptly inform the Issuer, the Securitization
Bondholders of the related Class and the Rating Agencies of such
termination or assignment. As soon as a replacement Swap Counterparty is
appointed, the Issuer shall notify the Trustee, the Securitization
Bondholders of the related Class and the Rating Agencies of such
appointment, specifying in such notice the name and address of such replace
ment Swap Counterparty.

                  SECTION 3.20 Taxes. So long as any of the Securitization
Bonds are outstanding, the Issuer shall 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
Collateral.


                                 ARTICLE IV

                   Satisfaction and Discharge; Defeasance

                  SECTION 4.01 Satisfaction and Discharge of Indenture;
Defeasance. (a) The Securitization Bonds of any Series, all moneys payable
with respect thereto and this Indenture as it applies to such Series shall
cease to be of further effect and the Lien hereunder shall be released with
respect to such Series, interest shall cease to accrue on the
Securitization Bonds of such Series and the Trustee, on demand of and at
the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to the
Securitization Bonds of such Series, when

                           (i)      either

                                    (A) all Securitization Bonds of such
                  Series theretofore authenti cated and delivered (other
                  than (1) Securitization Bonds that have been destroyed,
                  lost or stolen and that have been replaced or paid as
                  provided in Section 2.06 and (2) Securitization Bonds for
                  whose payment money has theretofore been depos ited in
                  trust or segregated and held in trust by the Issuer or
                  thereafter repaid to the Issuer or discharged from such
                  trust, as provided in Section 3.03(d) have been delivered
                  to the Trustee for cancellation; or

<PAGE>
                                    (B) the Expected Final Payment Date or
                  Redemption Date has occurred with respect to all
                  Securitization Bonds of such Series not theretofore
                  delivered to the Trustee for cancellation, and the Issuer
                  has irrevocably deposited or caused to be irrevocably
                  deposited with the Trustee cash, in trust for such
                  purpose, in an amount sufficient to pay and discharge the
                  entire indebtedness on such Securitization Bonds not
                  theretofore delivered to the Trustee on the Expected
                  Final Payment Date or Redemption Date, as applicable,
                  therefor;

                           (ii) the Issuer has paid or caused to be paid
         all other sums payable hereunder by the Issuer with respect to
         such Series; and

                           (iii) the Issuer has delivered to the Trustee an
         Issuer Officer's Certifi cate, an Issuer Opinion of Counsel and
         (if required by the TIA or the Trustee) an Inde pendent
         Certificate from a firm of certified public accountants, each
         meeting the applica ble requirements of Section 11.01 and each
         stating that all conditions precedent herein provided for relating
         to the satisfaction and discharge of this Indenture with respect
         to Securitization Bonds of such Series have been complied with.

                  (b) Subject to Sections 4.01(e) and 4.02, the Issuer at
any time may terminate (i) all its obligations under this Indenture with
respect to the Securitization Bonds of any Series ("Legal Defeasance
Option") or (ii) its obligations under Sections 3.04, 3.05, 3.06,(other
than with respect to amounts in the Defeasance Account), 3.07, 3.08, 3.09,
3.10, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17, 3.18, 3.19 and 3.20 and the
operation of Section 5.01(d) ("Covenant Defeasance Option") with respect to
any Series of Securitization Bonds. The Issuer may exercise the Legal
Defeasance Option with respect to any Series of Securitization Bonds
notwithstanding its prior exercise of the Covenant Defeasance Option with
respect to such Series.

                  (c) If the Issuer exercises the Legal Defeasance Option
with respect to any Series, the maturity of the Securitization Bonds of
such Series may not be (i) accelerated pursuant to Section 5.02 or (ii)
except as provided in Section 4.02, redeemed. If the Issuer exercises the
Covenant Defeasance Option with respect to any Series, the maturity of the
Securitization Bonds of such Series may not be accelerated because of an
Event of Default specified in Section 5.01(d).

                  (d) Upon satisfaction of the conditions set forth herein
to the exercise of the Legal Defeasance Option or the Covenant Defeasance
Option with respect to any Series of Securitization Bonds, the Trustee, on
demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of the obligations
that are termi nated pursuant to such exercise.

                  (e) Notwithstanding Sections 4.01(a) and 4.01(b) above,
(i) rights of registra tion of transfer and exchange, (ii) rights of
substitution of mutilated, destroyed, lost or stolen Securitization Bonds,
(iii) rights of Securitization Bondholders to receive payments of principal
and interest, but only from the amounts deposited with the Trustee for such
payments, (iv) Sections 4.03 and 4.04, (v) the rights, obligations and
immunities of the Trustee hereunder (including the rights of the Trustee
under Section 6.07 and the obligations of the Trustee under Section 4.03)
and (vi) the rights of Securitization Bondholders under this Indenture with
respect to the property deposited with the Trustee payable to all or any of
them, shall survive until the Securitization Bonds of the Series as to
which this Indenture or certain obligations hereunder have been satisfied
and discharged pursuant to Section 4.01(a) or 4.01(b) and have been paid in
full. Thereafter, the obligations in Sections 6.07 and 4.04 with respect to
such Series shall survive.

<PAGE>
                  SECTION 4.02 Conditions to Defeasance. (a) The Issuer
may exercise the Legal Defeasance Option or the Covenant Defeasance Option
with respect to any Series of Securitization Bonds only if:

                           (i) the Issuer irrevocably deposits or causes to
         be deposited in trust with the Trustee cash or U.S. Government
         Obligations for the payment of principal of and interest on such
         Series of Securitization Bonds to the Expected Payment Date or
         Redemp tion Date therefor, as applicable, such deposit to be made
         in the Defeasance Subaccount for such Series of Securitization
         Bonds;

                           (ii) the Issuer delivers to the Trustee a
         certificate from a nationally recognized firm of Independent
         accountants expressing its opinion that the payments of principal
         and interest when due and without reinvestment on the deposited
         U.S. Govern ment Obligations plus any deposited cash without
         investment will provide cash at such times and in such amounts
         (but, in the case of the Legal Defeasance Option only, not more
         than such amounts) as will be sufficient to pay in respect of the
         Securitization Bonds of such Series (A) subject to clause (B),
         principal in accordance with the Expected Amortization Schedule
         therefor, (B) if such Series is to be redeemed, the Redemption
         Price therefor on the Redemption Date therefor and (C) interest
         when due;

                           (iii) in the case of the Legal Defeasance
         Option, ninety-five (95) days pass after the deposit is made and
         during such ninety-five (95) day period no Default specified in
         Section 5.01(e) or 5.01(f) occurs which is continuing at the end
         of the period; provided, however, that in determining whether a
         default under Section 5.01(e) has occurred, the requirement that
         the decree or order shall remain unstayed and in effect for ninety
         (90) days shall be disregarded;

                           (iv) no Default has occurred and is continuing
         on the day of such deposit and after giving effect thereto;

                           (v) in the case of the Legal Defeasance Option,
         the Issuer delivers to the Trustee an Issuer Opinion of Counsel of
         nationally recognized tax counsel stating that (A) the Issuer has
         received from, or there has been published by, the Internal
         Revenue Service a ruling, or (B) since the date of execution of
         this Indenture, there has been a change in the applicable federal
         income tax law, in either case to the effect that, and based
         thereon such opinion shall confirm that, the Holders of the
         Securitization Bonds of such Series will not recognize income,
         gain or loss for federal income tax purposes as a result of the
         exercise of such Legal Defeasance Option and will be subject to
         federal income tax on the same amounts, in the same manner and at
         the same times as would have been the case if such legal
         defeasance had not occurred;

                           (vi) in the case of the Covenant Defeasance
         Option, the Issuer delivers to the Trustee an Issuer Opinion of
         Counsel of nationally recognized tax counsel to the effect that
         the Holders of the Securitization Bonds of such Series will not
         recognize income, gain or loss for federal income tax purposes as
         a result of the exercise of such Covenant Defeasance Option and
         will be subject to federal income tax on the same amounts, in the
         same manner and at the same times as would have been the case if
         such covenant defeasance had not occurred; and

                           (vii) the Issuer delivers to the Trustee an
         Issuer Officer's Certificate and an Issuer Opinion of Counsel,
         each stating that all conditions precedent to the satisfaction and
         discharge of the Securitization Bonds of such Series to the extent
         contemplated by this Article IV have been complied with.

<PAGE>
                  (b) Notwithstanding any other provision of this Section
4.02 to the contrary, no delivery of cash or U.S. Government Obligations to
the Trustee under this Section 4.02 shall terminate any obligations of the
Issuer under this Indenture with respect to any Securitization Bonds which
are to be redeemed prior to the Expected Final Payment Date therefor until
such Securitization Bonds shall have been irrevocably called or designated
for redemption on a date thereafter on which such Securitization Bonds may
be redeemed in accordance with the provisions of this Indenture and proper
notice of such redemption shall have been given in accordance with the
provisions of this Indenture or the Issuer shall have given the Trustee, in
form satisfactory to the Trustee, irrevocable instructions to give, in the
manner and at the times prescribed herein, notice of redemption of such
Series.

                  SECTION 4.03 Application of Trust Money. All moneys or
U.S. Govern ment Obligations deposited with the Trustee pursuant to
Sections 4.01 or 4.02 with respect to any Series of Securitization Bonds
shall be held in trust in the Defeasance Subaccount for such Series and
applied by it, in accordance with the provisions of the Securitization
Bonds and this Indenture, to the payment, either directly or through any
Paying Agent, as the Trustee may determine, to the Holders of the
particular Securitization Bonds for the payment or redemption of which such
moneys have been deposited with the Trustee, of all sums due and to become
due thereon for principal and interest. Such moneys shall be segregated and
held apart solely for paying such Securitization Bonds and such
Securitization Bonds shall not be entitled to any amounts on deposit in the
Collection Account other than amounts on deposit in the Defeasance
Subaccount for such Securitization Bonds.

                  SECTION 4.04 Repayment of Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this Indenture or the
Covenant Defeasance Option or Legal Defeasance Option with respect to the
Securitization Bonds of any Series, all moneys then held by any Paying
Agent other than the Trustee under the provisions of this Indenture with
respect to such Securitization Bonds shall, upon demand of the Issuer, be
paid to the Trustee to be held and applied according to Section 3.03 and
thereupon such Paying Agent shall be released from all further liability
with respect to such moneys.

                                 ARTICLE V

                                  Remedies

                  SECTION 5.01 Events of Default. "Event of Default"
wherever used herein, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

                  (a) default in the payment of any interest on any
Securitization Bond when the same becomes due and payable and the
continuation of such default for five Business Days;

                  (b) default in the payment of the then unpaid principal
of any Securitization Bond of any Series or Class on the Final Maturity
Date therefor;

                  (c) default in the payment of the Redemption Price for
any Securitization Bond on the Redemption Date therefor;

<PAGE>
                  (d) default in the observance or performance of any
covenant or agreement of the Issuer made in this Indenture (other than a
covenant or agreement, a default in the observance or performance of which
is specifically dealt with in clause (a), (b) or (c) above), or any
representation or warranty of the Issuer made in this Indenture or in any
certificate or other writing delivered pursuant hereto or in connection
herewith proving to have been incorrect in any material respect as of the
time when made, and any such default shall continue or not be cured, for a
period of 30 days after the earlier of (i) the date on which there shall
have been given, by registered or certified mail, to the Issuer by the
Trustee or to the Issuer and the Trustee by the Holders of at least 25% of
the Outstanding Amount of the Securitization Bonds of any Series or Class,
a written notice specifying such default or incorrect representation or
warranty and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder or (ii) the date the Issuer has knowledge of
the default;

                  (e) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Collateral in an involuntary case or proceeding
under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
for the Issuer or for any substantial part of the Collateral, or ordering
the winding-up or liquidation of the Issuer's affairs, and such decree or
order shall remain unstayed and in effect for a period of ninety (90)
consecutive days;

                  (f) the commencement by the Issuer of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by the Issuer
to the entry of an order for relief in an involuntary case under any such
law, or the consent by the Issuer to the appointment or taking possession
by a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official for the Issuer or for any substantial part of the
Collateral, or the making by the Issuer of any assignment for the benefit
of creditors, or the failure by the Issuer generally to pay its debts as
such debts become due, or the taking of action by the Issuer in furtherance
of any of the foregoing; or

                  (g) any act or failure to act by the State of Michigan or
any of its agencies (including the MPSC), officers or employees that
violates or is not in accordance with the pledge of the State of Michigan
in Section 10n(2) of the Customer Choice Act.

                  SECTION 5.02 Acceleration of Maturity; Rescission and
Annulment (a) If an Event of Default (other than an Event of Default under
Section 5.01(g)) occurs and is continuing, then and in every such case
either the Trustee or the Holders of Securitization Bonds representing not
less than a majority of the Outstanding Amount of the Securitization Bonds
of all Series may, but need not, declare all the Securitization Bonds to be
immediately due and payable, by a notice in writing to the Issuer (and to
the Trustee if given by the Securitization Bondholders), and upon any such
declaration the unpaid principal amount of the Securitization Bonds of all
Series, together with accrued and unpaid interest thereon through the date
of acceleration, shall become immediately due and payable.

                  (b) At any time after such declaration of acceleration of
maturity has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter provided in this
Article V, the Holders of Securitization Bonds represent ing a majority of
the Outstanding Amount of the Securitization Bonds of all Series, by
written notice to the Issuer and the Trustee, may rescind and annul such
declaration and its conse quences, provided that:

<PAGE>
                           (i)      the Issuer has paid or deposited with the
         Trustee, for deposit in the General Subaccount of the Collection
         Account, a sum sufficient to pay

                                    (A) all payments of principal of and
                  interest on all Securitiza tion Bonds of all Series and
                  all other amounts that would then be due hereunder or
                  upon such Securitization Bonds if the Event of Default
                  giving rise to such acceleration had not occurred; and

                                    (B)  all sums paid or advanced by the
                  Trustee hereunder and the reasonable compensation, expenses,
                  disbursements and advances of the Trustee and its agents
                  and counsel; and

                           (ii) all Events of Default, other than the
         nonpayment of the principal of the Securitization Bonds of all
         Series that has become due solely by such acceleration, have been
         cured or waived as provided in Section 5.12.

                  (c) No such rescission shall affect any subsequent
Default or impair any right consequent thereto.

                  SECTION 5.03 Collection of Indebtedness and Suits for
Enforcement by Trustee. (a) The Issuer covenants that if (i) Default is
made in the payment of any interest on any Securitization Bond when such
interest becomes due and payable and such Default continues for five
Business Days, (ii) Default is made in the payment of the then unpaid
principal of any Securitization Bond on the Final Maturity Date therefor or
(iii) Default is made in the payment of the Redemption Price or for any
Securitization Bond on the Redemption Date therefor, the Issuer shall, upon
demand of the Trustee, pay to it, for the benefit of the Holders of the
Securitization Bonds of such Series, such amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee and its
agents and counsel and the whole amount then due and payable on such
Securiti zation Bonds for principal and interest, with interest upon the
overdue principal and, to the extent payment at such rate of interest shall
be legally enforceable, upon overdue instalments of interest, at the
respective Interest Rate of such Series or the applicable Class of such
Series.

                  (b) In case the Issuer shall fail forthwith to pay the
amounts specified in clause (a) above upon such demand, the Trustee, in its
own name and as trustee of an express trust, may institute a Proceeding for
the collection of the sums so due and unpaid, and may prosecute such
Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon such Securitization Bonds and collect in
the manner provided by law out of the property of the Issuer or other
obligor upon such Securitization Bonds, wherever situated, the moneys
adjudged or decreed to be payable.

                  (c) If an Event of Default occurs and is continuing, the
Trustee may, as more particularly provided in Section 5.04, in its
discretion, proceed to protect and enforce its rights and the rights of the
Securitization Bondholders, by such appropriate Proceedings as the Trustee
shall deem most effective to protect and enforce any such rights, whether
for the specific enforcement of any covenant or agreement in this Indenture
or in aid of the exercise of any power granted herein, or to enforce any
other proper remedy or legal or equitable right vested in the Trustee by
this Indenture or by law including foreclosing or otherwise enforcing the
Lien on the Securitization Property securing the Securitization Bonds or
applying to the MPSC or a court of competent jurisdiction for sequestration
of revenues arising with respect to such Securitization Property.

                  (d) In case there shall be pending, relative to the
Issuer or any other obligor upon the Securitization Bonds or any Person
having or claiming an ownership interest in the Collateral, Proceedings
under Title 11 of the United States Code or any other applicable federal or
state bankruptcy, insolvency or other similar law, or in case a receiver,
assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been ap pointed for or taken
possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the
Issuer or other obligor upon the Securitization Bonds, or to the creditors
or property of the Issuer or such other obligor, the Trustee, irrespective
of whether the principal of any Securitization Bonds shall then be due and
payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand pursuant to
the provisions of this Section 5.03, shall be entitled and empowered, by
intervention in such Proceedings or otherwise:

<PAGE>
                           (i) to file and prove a claim or claims for the
         whole amount of principal and interest owing and unpaid in respect
         of the Securitization Bonds and to file such other papers or
         documents as may be necessary or advisable in order to have the
         claims of the Trustee (including any claim for reasonable
         compensation to the Trustee and each predecessor Trustee, and
         their respective agents, attorneys and counsel, and for
         reimbursement of all expenses and liabilities incurred, and all
         advances made, by the Trustee and each predecessor Trustee, except
         as a result of negligence or bad faith) and of the Securitization
         Bondholders allowed in such Proceedings;

                           (ii) unless prohibited by applicable law and
         regulations, to vote on behalf of the Holders of Securitization
         Bonds in any election of a trustee, a standby trustee or Person
         performing similar functions in any such Proceedings;

                           (iii) to collect and receive any moneys or other
         property payable or deliverable on any such claims and to
         distribute all amounts received with respect to the claims of the
         Securitization Bondholders and of the Trustee on their behalf; and

                           (iv) to file such proofs of claim and other
         papers or documents as may be necessary or advisable in order to
         have the claims of the Trustee or the Holders of Securitization
         Bonds allowed in any judicial proceedings relative to the Issuer,
         its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official
in any such Proceeding is hereby authorized by each of such Securitization
Bondholders to make payments to the Trustee, and, in the event that the
Trustee shall consent to the making of payments directly to such
Securitization Bondholders, to pay to the Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Trustee, each
predecessor Trustee and their respective agents, attorneys and counsel, and
all other expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of negligence or
bad faith.

                  (e) Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Securitization Bondholder any plan of reorganization,
arrangement, adjustment or composition affecting the Securitization Bonds
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Securitization Bondholder in any such
proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar Person.

                  (f) All rights of action and of asserting claims under
this Indenture, or under any of the Securitization Bonds, may be enforced
by the Trustee without the possession of any of the Securitization Bonds or
the production thereof in any trial or other Proceedings relative thereto,
and any such action or proceedings instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and
compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of
the Securitiza tion Bonds.

                  (g) In any Proceedings brought by the Trustee (and also
any Proceedings involving the interpretation of any provision of this
Indenture to which the Trustee shall be a party), the Trustee shall be held
to represent all the Holders of the Securitization Bonds, and it shall not
be necessary to make any Securitization Bondholder a party to any such
Proceedings.

<PAGE>
                  SECTION 5.04 Remedies. (a) If an Event of Default other
than under Section 5.01(g) occurs and is continuing, the Trustee may do one
or more of the following (subject to Section 5.05):

                           (i) institute Proceedings in its own name and as
         trustee of an express trust for the collection of all amounts then
         payable on the Securitization Bonds or under this Indenture with
         respect thereto, whether by declaration or otherwise, enforce any
         judgment obtained, and collect from the Issuer and any other
         obligor upon such Securiti zation Bonds moneys adjudged due;

                           (ii)     institute Proceedings from time to time
         for the complete or partial foreclosure of this Indenture with respect
         to the Collateral;

                           (iii) exercise any remedies of a secured party
         under the Michigan UCC, the Delaware UCC or the Customer Choice
         Act or any other applicable law and take any other appropriate
         action to protect and enforce the rights and remedies of the
         Trustee and the Holders of the Securitization Bonds of such
         Series;

                           (iv) sell the Collateral or any portion thereof
         or rights or interest therein, at one or more public or private
         sales called and conducted in any manner permitted by law; and

                           (v) exercise all rights, remedies, powers,
         privileges and claims of the Issuer against the Seller, the
         Administrator, the Servicer, any party to the Intercreditor
         Agreement or any Swap Counterparty under or in connection with the
         Sale Agreement, the Administration Agreement, the Servicing
         Agreement or any Interest Rate Swap Agreement, respectively, as
         provided in Section 3.19(b);

provided, however, that the Trustee may not sell or otherwise liquidate any
portion of the Collateral following an Event of Default, other than an
Event of Default described in Section 5.01(a), 5.01(b) or 5.01(c), with
respect to any Series unless (A) the Holders of one hundred percent (100%)
of the Outstanding Amount of the Securitization Bonds of all Series consent
thereto, (B) the proceeds of such sale or liquidation distributable to the
Securitization Bondhold ers of all Series are sufficient to discharge in
full all amounts then due and unpaid upon such Securitization Bonds for
principal and interest, or (C) the Trustee determines that the Collateral
will not continue to provide sufficient funds for all payments on the
Securitization Bonds of all Series as they would have become due if the
Securitization Bonds had not been declared due and payable and the Trustee
obtains the consent of Holders of 662/3% of the Outstanding Amount of the
Securitization Bonds of all Series. In determining such sufficiency or
insufficiency with respect to clause (B) and (C), the Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking
or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Collateral for such
purpose.

                  (b) If an Event of Default under Section 5.01(g) occurs
and is continuing, the Trustee, for the benefit of the Holders, shall be
entitled and empowered to the extent permitted by applicable law to
institute or participate in Proceedings reasonably necessary to compel
performance of or to enforce the pledge of the State of Michigan in Section
10n(2) of the Customer Choice Act and to collect any monetary damages
incurred by the Holders or the Trustee as a result of any such Event of
Default, and may prosecute any such Proceeding to final judgment or decree.
Such remedy shall be the only remedy that the Trustee may exercise if the
only Event of Default that has occurred and is continuing is an Event of
Default under Section 5.01(g).
<PAGE>

                  SECTION 5.05 Optional Preservation of the Collateral. If
the Securitization Bonds have been declared to be due and payable under
Section 5.02 following an Event of Default and such declaration and its
consequences have not been rescinded and annulled, the Trustee may, but
need not, elect, as provided in Section 5.11(c), to maintain possession of
the Collateral and not sell or liquidate the same. It is the desire of the
parties hereto and the Securitization Bondholders that there be at all
times sufficient funds for the payment of principal of and interest on the
Securitization Bonds, and the Trustee shall take such desire into account
when determining whether or not to maintain possession of the Collateral or
sell or liquidate the same. In determining whether to maintain possession
of the Collateral or sell or liquidate the same, the Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking
or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Collateral for such
purpose.

                  SECTION 5.06 Limitation of Proceedings. (a) No Holder of
any Securitiza tion Bond of any Series shall have any right to institute
any Proceeding, judicial or otherwise, or to avail itself of any remedies
provided in the Customer Choice Act, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:


                           (i) such Holder has previously given written
         notice to the Trustee of a continuing Event of Default;

                           (ii) the Holders of not less than twenty-five
         percent (25%) of the Outstanding Amount of the Securitization
         Bonds of all Series have made written request to the Trustee to
         institute such Proceeding in respect of such Event of Default in
         its own name as Trustee hereunder;

                           (iii) such Holder or Holders have offered to the
         Trustee security or indemnity reasonably satisfactory to the
         Trustee against the costs, expenses and liabilities to be incurred
         in complying with such request;

                           (iv) the Trustee for 60 days after its receipt
         of such notice, request and offer of indemnity has failed to
         institute such Proceedings; and

                           (v) no direction inconsistent with such written
         request has been given to the Trustee during such 60 day period by
         the Holders of a majority of the Outstanding Amount of the
         Securitization Bonds of all Series;

it being understood and intended that no one or more Holders of
Securitization Bonds shall have any right in any manner whatever by virtue
of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other Holders of Securitization Bonds or to
obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided.

                  (b) In the event the Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Securitization Bonds, each representing less than a majority of the
Outstanding Amount of the Securitization Bonds of all Series, the Trustee
in its sole discretion may determine what action, if any, shall be taken,
notwithstanding any other provisions of this Indenture.

                  SECTION 5.07 Unconditional Rights of Securitization
Bondholders To Receive Principal and Interest. Notwithstanding any other
provisions in this Indenture, the Holder of any Securitization Bond shall
have the right, which is absolute and unconditional, and shall not be
impaired without the consent of each such Holder, (a) to receive payment of
(i) the interest, if any, on such Securitization Bond on or after the due
dates thereof expressed in such Securitization Bond or in this Indenture,
(ii) the unpaid principal, if any, of such Securitization Bonds on or after
the Final Maturity Date therefor or (iii) in the case of redemption,
receive payment of the unpaid principal, if any, and interest, if any, on
such Securitization Bond on or after the Redemption Date therefor and (b)
to institute suit for the enforcement of any such payment, and such right
shall not be impaired without the consent of such Holder.

<PAGE>
                  SECTION 5.08 Restoration of Rights and Remedies. If the
Trustee or any Securitization Bondholder has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has
been discontinued or abandoned for any reason or has been determined
adversely to the Trustee or to such Securitization Bondholder, then and in
every such case the Issuer, the Trustee and the Securitization Bondholders
shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Securitization
Bondhold ers shall continue as though no such Proceeding had been
instituted.

                  SECTION 5.09 Rights and Remedies Cumulative. No right or
remedy herein conferred upon or reserved to the Trustee or to the
Securitization Bondholders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

                  SECTION 5.10 Delay or Omission Not a Waiver. No delay or
omission of the Trustee or any Securitization Bondholder to exercise any
right or remedy accruing upon any Default or Event of Default shall impair
any such right or remedy or constitute a waiver of any such Default or
Event of Default or an acquiescence therein. Every right and remedy given
by this Article V or by law to the Trustee or to the Securitization
Bondholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Securitiza tion Bondholders, as
the case may be.

                  SECTION 5.11 Control by Securitization Bondholders. The
Holders of a majority of the Outstanding Amount of the Securitization Bonds
of all Series (or, if less than all Series or Classes are affected, the
affected Series or Class or Classes) shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy
available to the Trustee with respect to the Securitization Bonds of such
Series or Class or Classes or exercising any trust or power conferred on
the Trustee with respect to such Series or Class or Classes; provided that

                  (a)  such direction shall not be in conflict with any rule
of law or with this Indenture or the Intercreditor Agreement;

                  (b) subject to the express terms of Section 5.04, any
direction to the Trustee to sell or liquidate the Collateral shall be by
the Holders of Securitization Bonds representing not less than one hundred
percent (100%) of the Outstanding Amount of the Securitization Bonds of all
Series;

                  (c) if the conditions set forth in Section 5.05 have been
satisfied and the Trustee elects to retain the Collateral pursuant to such
Section and elects not to sell or liquidate the same, then any direction to
the Trustee by Holders of Securitization Bonds representing less than one
hundred percent (100%) of the Outstanding Amount of the Securitization
Bonds of all Series to sell or liquidate the Collateral shall be of no
force and effect; and

<PAGE>
                  (d) the Trustee may take any other action deemed proper
by the Trustee that is not inconsistent with such direction;

provided, however, that, subject to Section 6.01, the Trustee need not take
any action that it determines might involve it in liability for which it
reasonably believes it will not be adequately indemnified against the
costs, expenses and liabilities which might be incurred by it in comply ing
with this request. The Trustee also need not take any action that it
determines might materially and adversely affect the rights of any
Securitization Bondholders not consenting to such action.

                  SECTION 5.12 Waiver of Past Defaults. (a) Prior to the
declaration of the acceleration of the maturity of the Securitization Bonds
of all Series as provided in Section 5.02, the Holders of not less than a
majority of the Outstanding Amount of the Securitization Bonds of all
Series may waive any past Default or Event of Default and its consequences
except a Default (i) in payment of principal of or interest on any of the
Securitization Bonds or (ii) in respect of a covenant or provision hereof
which cannot be modified or amended without the consent of the Holder of
each Securitization Bond of all Series or Classes affected. In the case of
any such waiver, the Issuer, the Trustee and the Holders of the
Securitization Bonds shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent
or other Default or impair any right consequent thereto.

                  (b) Upon any such waiver, such Default shall cease to
exist and be deemed to have been cured and not to have occurred, and any
Event of Default arising therefrom shall be deemed to have been cured and
not to have occurred, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or Event of Default
or impair any right consequent thereto.

                  SECTION 5.13 Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Securitization Bond by such
Holder's acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right
or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 5.13 shall not
apply to (a) any suit instituted by the Trustee, (b) any suit instituted by
any Securitization Bondholder, or group of Securitization Bondholders, in
each case holding in the aggregate more than ten percent (10%) of the
Outstanding Amount of the Securitization Bonds of a Series or (c) any suit
instituted by any Securitization Bondholder for the enforcement
of the payment of (i) interest on any Securitization Bond on or after the
due dates expressed in such Securitization Bond and in this Indenture, (ii)
the unpaid principal, if any, of any Securitiza tion Bond on or after the
Final Maturity Date therefor or (iii) in the case of redemption, the unpaid
principal of and interest on any Securitization Bond on or after the
Redemption Date therefor.

                  SECTION 5.14 Waiver of Stay or Extension Laws. The
Issuer covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead or in any manner whatsoever, claim or
take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture; and the Issuer (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law
had been enacted.

                  SECTION 5.15 Action on Securitization Bonds. The
Trustee's right to seek and recover judgment on the Securitization Bonds or
under this Indenture shall not be affected by the seeking, obtaining or
application of any other relief under or with respect to this Indenture.
Neither the Lien of this Indenture nor any rights or remedies of the
Trustee or the Securitization Bondholders shall be impaired by the recovery
of any judgment by the Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Collateral or upon
any of the assets of the Issuer.


<PAGE>
                                 ARTICLE VI

                                The Trustee

                  SECTION 6.01 Duties and Liabilities of Trustee. (a) If
an Event of Default has occurred and is continuing, the Trustee shall
exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.

                  (b)      Except during the continuance of an Event of Default:

                           (i) the Trustee undertakes to perform such
         duties and only such duties as are specifically set forth in this
         Indenture and no implied covenants or obligations shall be read
         into this Indenture against the Trustee; and

                           (ii) in the absence of bad faith on its part,
         the Trustee may conclusively rely, as to the truth of the
         statements and the correctness of the opinions expressed therein,
         upon certificates or opinions furnished to the Trustee and
         conforming to the requirements of this Indenture but, in the case
         of any such certificates or opinions which by any provision hereof
         are specifically required to be furnished to the Trustee, the
         Trustee shall examine the same to determine whether or not they
         conform to the require ments of this Indenture.

                  (c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own
wilful misconduct, except that:

                           (i) this clause (c) does not limit the effect of
         clause (b) of this Section 6.01;

                           (ii) the Trustee shall not be liable for any
         error of judgment made in good faith by a Responsible Officer
         unless it is proved that the Trustee was negligent in ascertaining
         the pertinent facts; and

                           (iii) the Trustee shall not be liable with
         respect to any action it takes or omits to take in good faith in
         accordance with a direction received by it pursuant to Section
         5.11.

                  (d) Every provision of this Indenture that in any way
relates to the Trustee is subject to clauses (a), (b) and (c) of this
Section 6.01.

                  (e) The Trustee shall not be liable for interest on any
money received by it except as provided in this Indenture or as the Trustee
may agree in writing with the Issuer.

                  (f) Money held in trust by the Trustee need not be
segregated from other funds held by the Trustee except to the extent
required by law or the terms of this Indenture, the Sale Agreement, the
Servicing Agreement or any Interest Rate Swap Agreement.

                  (g) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayments of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.

                  (h) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section 6.01 and to the
provisions of the TIA.

                  (i) Under no circumstances shall the Trustee be liable
for any indebtedness of the Issuer, the Servicer or the Seller evidenced by
or arising under the Securitization Bonds or any Basic Document.

                  SECTION 6.02 Rights of Trustee. (a) The Trustee may rely
on any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate any fact
or matter stated in the document.

                  (b) Before the Trustee acts or refrains from acting, it
may require an Issuer Officer's Certificate or an Issuer Opinion of
Counsel. The Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on an Issuer Officer's Certificate or an
Issuer Opinion of Counsel.

<PAGE>
                  (c) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent attorney, custodian, or nominee appointed
with due care by it thereunder.

                  (d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that the Trustee's conduct
does not constitute wilful misconduct, negligence or bad faith.

                  (e) The Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this
Indenture and the Securitization Bonds shall be full and complete
authorization and protection from liability in respect to any action taken,
omitted or suffered by it hereunder in good faith and in accordance with
the advice or opinion of such counsel.

                  SECTION 6.03 Individual Rights of Trustee. The Trustee
in its individual or any other capacity may become the owner or pledgee of
Securitization Bonds and may otherwise deal with the Issuer or its affiliates
with the same rights it would have if it were not Trustee. Any Paying Agent,
Securitization Bond Registrar, co-registrar or co-paying\agent, or agent
appointed pursuant to Section 3.02(b) may do the same with like rights. However,
the Trustee must comply with Sections 6.11 and 6.12.

                  SECTION 6.04 Trustee's Disclaimer. The Trustee shall not
be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Securitization Bonds. The Trustee shall
not be accountable for the Issuer's use of the proceeds from the
Securitization Bonds, and the Trustee shall not be responsible for any
statement of the Issuer in this Indenture or in any document issued in
connection with the sale of the Securitization Bonds or in the
Securitization Bonds other than the Trustee's certificate of
authentication. The Trustee shall not be responsible for the form,
character, genuineness, sufficiency, value or validity of any of the
Collateral, or for or in respect of the validity or sufficiency of the
Securitization Bonds (other than the certificate of authentication for the
Securitization Bonds) or the Basic Documents and the Trustee shall in no
event assume or incur any liability, duty or obligation to any Holder of a
Securitization Bond, other than as expressly provided for in this
Indenture. The Trustee shall not be liable for the default or misconduct of
the Issuer, the Seller, the Servicer or the Member or any Manager of the
Issuer under any Basic Document or otherwise, or the default or misconduct
of any counterparty under any Interest Rate Swap Agreement, and the Trustee
shall have no obligation or liability to perform the obligations of the
Issuer.
<PAGE>

                  SECTION 6.05 Notice of Defaults. If a Default occurs and
is continuing with respect to any Class or Series and if it is known to a
Responsible Officer of the Trustee, the Trustee shall mail to each Rating
Agency and to each Holder of Securitization Bonds of all Series notice of
the Default within thirty (30) days after it occurs. Except in the case of
a Default in payment of principal of or interest on any Securitization
Bond, the Trustee may withhold the notice if and so long as a committee of
its Responsible Officers in good faith determines that withholding the
notice is in the interests of Securitization Bondholders.

                  SECTION 6.06 Reports by Trustee to Holders. (a) The
Trustee shall deliver to each Holder of Securitization Bonds such
information as may be required to enable such Holder to prepare its federal
and state income tax returns.

                  (b) With respect to each Series of Securitization Bonds,
on or prior to each Payment Date therefor, the Trustee shall deliver a
statement prepared by the Trustee to each Holder of Securitization Bonds
which shall include (to the extent applicable) the following information
(and any other information so specified in the Series Supplement for such
Series) as to the Securitization Bonds of such Series with respect to such
Payment Date or the period since the previous Payment Date, as applicable:

                           (i) the amount paid to Holders of such
         Securitization Bonds in respect of interest; such amount to be
         expressed as a dollar amount per thousand;

                           (ii) the amount paid to Holders of such
         Securitization Bonds in respect of principal; such amount to be
         expressed as a dollar amount per thousand;

                           (iii) the Securitization Bond Balance, after
         giving effect to the pay ments to be made on such Payment Date,
         and the Projected Securitization Bond Balance, in each case for
         such Series and as of such Payment Date;

                           (iv) the amount on deposit in the
         Overcollateralization Subaccount for such Series and the Scheduled
         Overcollateralization Level for such Series as of such Payment
         Date;

                           (v) the amount on deposit in the Capital
         Subaccount for such Series as of such Payment Date;

                           (vi) the amount, if any, on deposit in the
         Reserve Subaccount as of such Payment Date;

                           (vii) the amount to be paid to any Swap
         Counterparty, if any, (on a gross and a net basis, separately
         stated) under any Interest Rate Swap Agreement on or before that
         Payment Date;

                           (viii) the amounts paid to the Trustee since the
         preceding Payment Date;

                           (ix) the amounts paid to the Servicer since the
         preceding Payment Date; and

                           (x) the amount of any other transfers and
         payments to be made on that Payment Date pursuant to the
         Indenture.

                  (c) If any Securitization Bonds are listed on the
Luxembourg Stock Exchange and rules of such exchange so require, the
Trustee shall arrange for publication in an Authorized Newspaper that such
statement shall be available with the Issuer's listing agent in Luxembourg
appointed pursuant to Section 3.02(b).
<PAGE>

                  (d) The Trustee's responsibility for disbursing the
information described in clause (b) above to Holders of Securitization
Bonds is limited to the availability, timeliness and accuracy of the
information provided by the Servicer pursuant to Section 3.05 and Annex 1
of the Servicing Agreement.

                  SECTION 6.07 Compensation and Indemnity. (a) The Issuer
shall pay to the Trustee from time to time reasonable compensation for its
services. The Trustee's compensa tion shall not be limited by any law on
compensation of a trustee of an express trust. The Issuer shall reimburse
the Trustee for all reasonable out-of-pocket expenses, disbursements and
advances incurred or made by it, including costs of collection, in addition
to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The Issuer shall
indemnify and hold harmless the Trustee from and against any and all costs,
damages, expenses, losses, liabilities or other amounts whatsoever
(including reasonable counsel fees) incurred by the Trustee in connection
with the administration of this trust, the enforcement of this trust and
all of the Trustee's rights, powers and duties under this Indenture and the
perfor mance by the Trustee of the duties and obligations of the Trustee
under or pursuant to this Indenture. The Trustee shall notify the Issuer
promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Issuer shall not relieve the Issuer of its
obligations hereunder.

                  (b) The Issuer shall defend the claim and the Trustee may
have separate counsel and the Issuer shall pay the reasonable fees and
expenses of such counsel. The Issuer need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee
(i) through the Trustee's own wilful misconduct, negligence or bad faith or
(ii) to the extent the Trustee was reimbursed for or indemnified against
any such loss, liability or expense by the Seller pursuant to the Sale
Agreement or by the Servicer pursuant to the Servicing Agreement.

                  (c) When the Trustee incurs expenses after the occurrence
of a Default specified in Section 5.01(e) or 5.01(f) with respect to the
Issuer, the expenses are intended to constitute expenses of administration
under Title 11 of the United States Code or any other applicable federal or
state bankruptcy, insolvency or similar law.

                  SECTION 6.08 Replacement of Trustee. (a) The Trustee may
resign at any time upon thirty (30) days' prior written notice by so
notifying the Issuer. The Issuer may remove the Trustee with or without
cause at any time, with prior notice to the Rating Agencies, upon thirty
(30) days' prior written notice, and shall remove the Trustee if:

                           (i) the Trustee fails to comply with Section
         6.11;

                           (ii) the Trustee is adjudged a bankrupt or
         insolvent;

                           (iii) a receiver or other public officer takes
         charge of the Trustee or its property; or

                           (iv) the Trustee otherwise becomes incapable of
         acting.

<PAGE>
                  (b) If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason (the Trustee in such event
being referred to herein as the "Retiring Trustee"), the Issuer shall
promptly appoint a successor Trustee.

                  (c) In addition, the Holders of a majority in Outstanding
Amount of the Securitization Bonds of all Series may remove the Trustee by
so notifying the Issuer and the Trustee and such Holders may appoint a
successor Trustee.

                  (d) A successor Trustee shall deliver a written
acceptance of its appointment to the Retiring Trustee and to the Issuer.
Thereupon the resignation or removal of the Retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. No resignation or removal of
the Trustee shall become effective until the acceptance of the appointment
by a successor Trustee. Upon the date of such succession, the successor
Trustee shall mail a notice of its succession to Securitization
Bondholders. The Retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee.

                  (e) If a successor Trustee does not take office within 60
days after the Retiring Trustee resigns or is removed, the Retiring
Trustee, the Issuer or the Holders of a majority in Outstanding Amount of
the Securitization Bonds of all Series may petition any court of competent
jurisdiction for the appointment of a successor Trustee.

                  (f) If the Trustee fails to comply with Section 6.11, any
Securitization Bondholder may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.

                  (g) Notwithstanding the replacement of the Trustee
pursuant to this Section 6.08, the Issuer's obligations under Section 6.07
shall continue for the benefit of the Retiring Trustee.

                  SECTION 6.09 Successor Trustee by Merger. (a) If the
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation or banking association shall, without any further act, be the
successor Trustee. Notice of any such event shall be promptly given to each
Rating Agency by the successor Trustee and any agent in Luxembourg
appointed pursuant to Section 3.02(b).

                  (b) In case at the time such successor or successors by
merger, conversion, consolidation or transfer shall succeed to the trusts
created by this Indenture any of the Securiti zation Bonds shall have been
authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any Retiring Trustee, and
deliver such Securitiza tion Bonds so authenticated; and in case at that
time any of the Securitization Bonds shall not have been authenticated, any
successor to the Trustee may authenticate such Securitization Bonds either
in the name of any Retiring Trustee hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall
have the full force and effect granted by the Securitization Bonds or by
this Indenture and this force and effect shall be equal to any certifi cate
issued by the Trustee.

                  SECTION 6.10 Appointment of Co-Trustee or Separate
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Collateral may at the time be located, the Trustee
shall have the power and may execute and deliver all instruments to appoint
one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Collateral, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Securitization Bondholders, such title to the Collateral, or any part
hereof, and, subject to the other provisions of this Section 6.10, such
powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall
be required to meet the terms of eligibility as a successor trustee under
Section 6.11 and no notice to Securitization Bondholders of the appointment
of any co-trustee or separate trustee shall be required under Section 6.08.
Notice of any such appointment shall be promptly given to each Rating
Agency by the Trustee.

<PAGE>
                  (b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:

                           (i) all rights, powers, duties and obligations
         conferred or imposed upon the Trustee shall be conferred or
         imposed upon and exercised or performed by the Trustee and such
         separate trustee or co-trustee jointly (it being understood that
         such separate trustee or co-trustee is not authorized to act
         separately without the Trustee joining in such act), except to the
         extent that under any law of any jurisdiction in which any
         particular act or acts are to be performed the Trustee shall be
         incompetent or unquali fied to perform such act or acts, in which
         event such rights, powers, duties and obliga tions (including the
         holding of title to the Collateral or any portion thereof in any
         such jurisdiction) shall be exercised and performed singly by such
         separate trustee or co-trustee, but solely at the direction of the
         Trustee;

                           (ii) no trustee hereunder shall be personally
         liable by reason of any act or omission of any other trustee
         hereunder; and

                           (iii) the Trustee may at any time accept the
         resignation of or remove any separate trustee or co-trustee.

                  (c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to
this Indenture and the conditions of this Article VI. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as may be
provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the
conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee.

                  (d) Any separate trustee or co-trustee may at any time
constitute the Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Agreement on its behalf and in its name. If any
separate trustee or co-trustee shall die, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.

                  SECTION 6.11 Eligibility; Disqualification. The Trustee
shall at all times satisfy the requirements of TIA Section 310(a) and
Section 26(a)(i) of the Investment Company Act of 1940. The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in
its most recent published annual report of condition and it shall have a
long term debt rating of "BBB-" or better by Standard & Poor's, "Baa3" or
better by Moody's and "BBB-" or better by Fitch. The Trustee shall comply
with TIA Section 310(b), including the optional provision permitted by the
second sentence of TIA Section 310(b)(9); provided, however, that there
shall be excluded from the operation of TIA Section 310(b)(1) any indenture
or indentures under which other securities of the Issuer are outstanding if
the requirements for such exclusion set forth in TIA Section 310(b)(1) are
met.

                  SECTION 06.12 Preferential Collection of Claims Against
Issuer. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.

                  SECTION 06.13 Representations and Warranties of the
Trustee. The Trustee hereby represents and warrants that:

<PAGE>
                  (a) the Trustee is a banking corporation validly existing
in good standing under the laws of the State of New York; and

                  (b) the Trustee has full power, authority and legal right
to execute, deliver and perform this Indenture and the Basic Documents to
which the Trustee is a party and has taken all necessary action to
authorize the execution, delivery and performance by it of this Indenture
and such Basic Documents.


                                ARTICLE VII

               Securitization Bondholders' Lists and Reports

                  SECTION 7.01 Issuer To Furnish Trustee Names and
Addresses of Securitization Bondholders. The Issuer shall furnish or cause
to be furnished to the Trustee (a) not more than five days after the
earlier of (i) each Record Date with respect to each Series and (ii) three
months after the last Record Date with respect to each Series, a list, in
such form as the Trustee may reasonably require, of the names and addresses
of the Holders of Securitization Bonds of such Series as of such Record
Date, (b) at such other times as the Trustee may request in writing, within
thirty (30) days after receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than ten days prior to the
time such list is furnished; provided, however, that so long as the Trustee
is the Securitization Bond Registrar, no such list shall be required to be
furnished. In addition, the Issuer shall furnish such list to any listing,
transfer or paying agent appointed under Section 3.02(b) to the extent such
information is required by the rules and regulations of the Luxembourg
Stock Exchange.

                  SECTION 7.02 Preservation of Information; Communications
to Securiti zation Bondholders. (a) The Trustee shall preserve, in as
current a form as is reasonably practicable, the names and addresses of the
Holders of Securitization Bonds contained in the most recent list furnished
to the Trustee as provided in Section 7.01 and the names and addresses of
Holders of Securitization Bonds received by the Trustee in its capacity as
Securitization Bond Registrar. The Trustee may destroy any list furnished
to it as provided in such Section 7.01 upon receipt of a new list so
furnished.

                  (b) Securitization Bondholders may communicate with other
Securitization Bondholders pursuant to Section 312(b) of the TIA, with
respect to their rights under this Indenture or under the Securitization
Bonds.

                  (c) The Issuer, the Trustee and the Securitization Bond
Registrar shall have the protection of Section 312(c) of the TIA.

                  SECTION 7.03  Reports by Issuer.  (a)  The Issuer shall:

                           (i) file with the Trustee and, so long as any
         Securitization Bonds are listed on the Luxembourg Stock Exchange
         and its rules so require, with the listing agent of the Issuer in
         Luxembourg appointed pursuant to Section 3.02(b), within fifteen
         (15) days after the Issuer is required to file the same with the
         Commission, copies of the annual reports and of the information,
         documents and other reports (or copies of such portions of any of
         the foregoing as the Commission may from time to time by rules and
         regulations prescribe) which the Issuer may be required to file
         with the Commission pursuant to Section 13 or 15(d) of the
         Exchange Act;

                           (ii) file with the Trustee, the Commission and,
         so long as any Securiti zation Bonds are listed on the Luxembourg
         Stock Exchange, the listing agent in Luxem bourg appointed
         pursuant to Section 3.02(b), in accordance with rules and
         regulations prescribed from time to time by the Commission or the
         Luxembourg Stock Exchange, respectively, such additional
         information, documents and reports with respect to compli ance by
         the Issuer with the conditions and covenants of this Indenture as
         may be required from time to time by such rules and regulations;
         and
<PAGE>

                           (iii) supply to the Trustee (and the Trustee
         shall transmit by mail to all Securitization Bondholders described
         in TIA Section 313(c)) and, so long as any Securiti zation Bonds
         are listed on the Luxembourg Stock Exchange and its rules so
         require, to the listing agent of the Issuer in Luxembourg
         appointed pursuant to Section 3.02(b), such summaries of any
         information, documents and reports required to be filed by the
         Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) as
         may be required by rules and regulations prescribed from time to
         time by the Commission.

                  (b) Unless the Issuer otherwise determines, the fiscal
year of the Issuer shall end on December 31 of each year.

                  SECTION 7.04 Reports by Trustee. (a) If required by TIA
Section 313(a), within 60 days after the end of each fiscal year of the
Issuer, commencing with the year after the issuance of the Securitization
Bonds of any Series, the Trustee shall mail to each Holder of
Securitization Bonds of such Series as required by TIA Section 313(c) a
brief report dated as of such date that complies with TIA Section 313(a).
The Trustee also shall comply with TIA Section 313(b); provided, however,
that the initial report so issued shall be delivered not more than twelve
(12) months after the initial issuance of each Series.

                  (b) A copy of each report at the time of its mailing to
Securitization Bond holders shall be filed by the Trustee with the
Commission and each stock exchange, if any, on which the Securitization
Bonds are listed (to the extent required by the rules of such exchange).
The Issuer shall notify the Trustee if and when the Securitization Bonds
are listed on any stock exchange.

                  (c) The Trustee shall provide notice to the Rating
Agencies of any withdraw als from the Collection Account other than on a
Payment Date and other than the Monthly Servicing Fee or the monthly
Trustee's fee plus expenses (other than any Indemnity Amounts).

                  SECTION 7.05 Provision of Servicer Reports. Upon the
written request of any Securitization Bondholder to the Trustee addressed
to the Corporate Trust Office, the Trustee shall provide such
Securitization Bondholder with a copy of the Issuer Officer's Certificate
referred to in Section 3.05 of the Servicing Agreement and the Annual
Accountant's Report referred to in Section 3.06 of the Servicing Agreement.
If any Securitization Bonds are listed on the Luxembourg Stock Exchange and
rules of such exchange so require, the Trustee shall also arrange for
publication in an Authorized Newspaper that a copy of such Issuer Officer's
Certifi cate and such Annual Accountant's Report shall be available with
the Issuer's listing agent in Luxembourg appointed pursuant to Section
3.02(b).

                                ARTICLE VIII

                    Accounts, Disbursements and Releases

                  SECTION 8.01 Collection of Money. Except as otherwise
expressly provided herein, the Trustee may demand payment or delivery of,
and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Trustee pursuant to this
Indenture. The Trustee shall apply all such money received by it as
provided in this Indenture. Except as otherwise expressly provided in this
Indenture, if any default occurs in the making of any payment or
performance under any agreement or instrument that is part of the
Collateral, the Trustee may take such action as may be appropriate to
enforce such payment or performance, including the institution and
prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.

                  SECTION 8.02 Collection Account. (a)(i) On or prior to
the Series Issuance Date for the first Series issued hereunder, the Issuer
shall open, at the Trustee's Corporate Trust Office, or at another Eligible
Institution, one or more segregated trust accounts in the Trustee's name
for the benefit of the Holders (collectively, the "Collection Account").
The Collection Account shall initially be divided into subaccounts, which
need not be separate bank accounts: a general subaccount (the "General
Subaccount"), an overcollateralization subaccount for each Series of
Securitization Bonds (each, an "Overcollateralization Subaccount" or the
"Series Overcollateralization Subaccount"), a capital subaccount for each
Series of Securitization Bonds (each, a "Capital Subaccount" or the "Series
Capital Subaccount"), a capital reserve subaccount (the "Capital Reserve
Subaccount"), a reserve subaccount (the "Reserve Subaccount"), a series
<PAGE>
subaccount for each Series of Securitization Bonds (each, a "Series
Subaccount") and a class subaccount for any Class of any Series of
Securitization Bonds which has a floating rate of interest as specified in
any Series Supplement (each, a "Class Subaccount"). On or prior to the
Series Issuance Date for each Series issued after the Series Issuance Date
for the first Series issued hereunder, the Issuer shall establish an
additional Series Subaccount therefor and a Class Subaccount for any Class
of such Series which has a floating rate of interest and in respect of
which the Issuer has entered into an Interest Rate Swap Agreement, as
Subaccounts of the Collection Account. Prior to depositing funds or U.S.
Government Obligations in the Collection Account pursuant to Sections 4.01
or 4.02, the Issuer shall establish defeasance subaccounts (each, a
"Defeasance Subaccount") for each Series for which funds shall be
deposited, as subaccounts of the Collection Account. All amounts in the
Collection Account not allocated to any other Subaccount shall be allocated
to the General Subaccount. Prior to the initial Payment Date, all amounts
in the Collection Account (other than funds deposited into the Capital
Subaccount, up to the Required Capital Amount) shall be allocated to the
General Subaccount. All payments received by the Trustee from any Swap
Counterparty at any time shall be deposited in the related Class
Subaccount. All references to the Collection Account shall be deemed to
include reference to all subaccounts contained therein. Withdrawals from
and deposits to each of the foregoing subaccounts of the Collection Account
shall be made as set forth in Sections 4.01, 4.02, 4.03 and 8.02(d) through
(n). The Collection Account shall at all times be maintained in an Eligible
Securities Account and only the Trustee shall have access to the Collection
Account for the purpose of making deposits in and withdrawals from the
Collection Account in accordance with this Indenture. Funds in the
Collection Account shall not be commingled by the Issuer with any other
moneys, and shall not be commingled by the Trustee. All moneys deposited
from time to time in the Collection Account, all deposits therein pursuant
to this Indenture, and all investments made in Eligible Investments with
such moneys, including all income or other gain from such investments,
shall be held by the Trustee in the Collection Account as part of the
Collateral as herein provided, with the exception of any amount up to
$100,000 held at any time in the Capital Reserve Subaccount. The Capital
Reserve Subaccount shall be funded with $100,000 from amounts contributed
to the Capital Subaccount for the initial Series of Securitiza tion Bonds.
Amounts on deposit in the Capital Reserve Subaccount shall be available,
upon request of the Issuer, to pay any expenses of the Issuer.

                  (ii) Notwithstanding any other provision of this
         Indenture, the Collection Account shall be a securities account
         and shall be established only with a securities intermediary (as
         defined in Section 8-102(1)(m) of the Michigan UCC) that agrees
         with the Trustee that (A) the Collection Account shall be a
         securities account of the Trustee, (B) all property credited to
         the Collection Account shall be treated as a financial asset, (C)
         such securities intermediary shall treat the Trustee as entitled
         to exercise the rights that comprise each financial asset credited
         to the Collection Account, (D) such securities intermediary shall
         comply with entitlement orders originated by the Trustee without
         the further consent of any other person or entity, (E) such
         securities intermediary shall not agree with any person other than
         the Trustee to comply with entitlement orders originated by such
         other person, (F) the Collection Account and all property credited
         to it shall not be subject to any Lien or right of set-off in
         favor of such securities intermediary or anyone claiming through
         it (other than the Trustee), and (G) such agreement shall be
         governed by the laws of the State of Michigan. The Collection
         Account shall be under the control (within the meaning of Section
         8-106 of the Michigan UCC) of the Trustee. If at any time the
         Collection Account ceases to be an Eligible Securities Account,
         the Trustee shall, within ten (10) days, establish a new
         Collection Account as an Eligible Securities Account.

                  (b) All or a portion of the funds in the Collection
Account shall be invested in Eligible Investments and reinvested by the
Trustee upon Issuer Order; provided, however, that no funds in the
Defeasance Subaccount for any Series of Securitization Bonds shall be
invested in Eligible Investments or otherwise, except that U.S. Government
Obligations deposited by the Issuer with the Trustee pursuant to Sections
4.01 or 4.02 shall remain as such. Except as provided in Section
8.02(g)(x), all income or other gain from investments of moneys deposited
in the Collection Account shall be deposited by the Trustee in the
Collection Account, and any loss resulting from such investments shall be
charged to the Collection Account. The Issuer shall not direct the Trustee
to make any investment of any funds or to sell any investment held in the
Collection Account unless the security interest granted and perfected in
such account will continue to be perfected in such investment or the
proceeds of such sale, in either case without any further action by any
Person, and, in connection with any direction to the Trustee to make any
such investment or sale, if requested by the Trustee, the Issuer shall
deliver to the Trustee an Issuer Opinion of Counsel, acceptable to the
Trustee, to such effect. Subject to Section 6.01(c), the Trustee shall not
in any way be held liable for the selection of Eligible Investments or for
investment losses incurred thereon except for losses attributable to the
Trustee's failure to make payments on such Eligible Investments issued by
<PAGE>
the Trustee, in its commercial capacity as principal obligor and not as
Trustee, in accordance with their terms. The Trustee shall have no
liability in respect of losses incurred as a result of the liquidation of
any Eligible Investment prior to its stated maturity or the failure of the
Issuer to provide timely written investment direction. The Trustee shall
have no obligation to invest or reinvest any amounts held hereunder in the
absence of written investment direction pursuant to an Issuer Order;
provided, however, that if (i) the Issuer shall have failed to give
investment directions for any funds on deposit in the Collec tion Account
to the Trustee by 11:00 a.m. (prevailing New York City time) (or such other
time as may be agreed by the Issuer and Trustee) on any Business Day, or
(ii) a Default or Event of Default shall have occurred and be continuing
but the Securitization Bonds shall not have been declared due and payable
pursuant to Section 5.02, then the Trustee shall, to the fullest extent
practicable, invest and reinvest funds in the Collection Account in one or
more Eligible Invest ments of the kind described in clause (e) of the
definition thereof.

                  (c) Any Securitization Charge Collections remitted by the
Servicer to the Trustee, any Indemnity Amounts remitted to the Trustee by
the Seller or the Servicer or otherwise received by the Trustee or the
Issuer, any other proceeds of Collateral received by the Servicer, the
Issuer or the Trustee, and any amounts paid by any counterparty under any
Interest Rate Swap Agreement received by the Servicer, the Issuer or the
Trustee, shall be deposited in the General Subaccount.

                  (d) Monthly, on the 20th day of each month, or if such
day is not a Business Day, the preceding Business Day, beginning January
20, 2002, the fee owed to the Trustee in an amount equal to $1,875 for such
month, plus any expenses, including legal fees and expenses, Indemnity
Amounts (up to a maximum of $10,000,000 in the aggregate for the then
current and all prior Payment Dates and for all Series, provided that the
payment of such amounts does not result in an Event of Default, unless the
Issuer has received confirmation from S&P and Fitch that a further amount
will not result in a reduction or a withdrawal of the then current rating
of the outstanding Securitization Bonds), shall, at the direction of the
Servicer, be paid to the Trustee.

                  (e) After the distribution made pursuant to clause (d)
above, monthly, on the 20th day of each month, or if such day is not a
Business Day, the preceding Business Day, beginning January 20, 2002, the
Monthly Servicing Fee and any unpaid Monthly Servicing Fees shall, at the
direction of the Servicer, be paid to the Servicer.

                  (f) On each Payment Date, or such other date related to
such Payment Date as may be specified in the related Series Supplement, the
Trustee, at the direction of the Servicer, shall allocate to each Class
Subaccount from the related Series Subaccount the amounts specified in the
related Series Supplement. Such amounts shall be so allocated after taking
into account all allocations required in connection with such Payment Date
under clauses (d) and (e) above and (g)(i) through (iii) below; provided
that in the event of any shortfall of amounts to be allocated pursuant to
clause (g)(iii) among more than one Class of the applicable Series, amounts
shall be allocated to such Class Subaccount on a Pro Rata basis with all
other Classes of the relevant Series. Amounts in each Class Subaccount
shall be applied as provided in the related Series Supplement.

                  (g) Except as otherwise provided in any Series Supplement
with respect to any floating rate Class, on each Payment Date, by 12:00
noon (prevailing New York City time), or if such day is not a Business Day,
on the following Business Day, the Trustee shall, at the direction of the
Servicer, apply all amounts on deposit in the General Subaccount of the
Collection Account and any investment earnings on the subaccounts in the
Collection Account, after distribution in accordance with clauses (d) and
(e) above, and, subject to the qualifications therein, after allocation to
any Class Subaccount and payment to any related Swap Counterparty in
accordance with clause (f) above, in the following priority:
<PAGE>

                           (i) the administration fee payable under the
         Administration Agree ment, as specified in the related Series
         Supplement, shall be paid to the Administrator; and fees payable
         to the Independent Managers in an amount equal to $583.33 for such
         Payment Date, shall be paid to the Independent Managers;

                           (ii) so long as no Event of Default has occurred
         and is continuing or would be caused by such payment, all
         Operating Expenses other than distributions in accordance with
         clauses (d), (e) and (g)(i) above shall be paid to the Persons
         entitled thereto, provided that the amount paid on such Payment
         Date pursuant to this clause (g)(ii) may not exceed $100,000 in
         the aggregate for all Series;

                           (iii) an amount equal to Interest payable on
         each Class of each Series of Securitization Bonds on such Payment
         Date shall be allocated on a Pro Rata basis to the corresponding
         Series Subaccount, which, to the extent provided in any Series
         Supplement with respect to interest on any floating rate Class,
         shall be an amount equal to the applicable amount specified in the
         related Series Supplement payable with respect to that Class and
         which will be allocated Pro Rata to the corresponding Class
         Subaccount;

                           (iv) an amount equal to any Principal of each
         Class of each Series of Securitization Bonds payable as a result
         of acceleration pursuant to Section 5.02, any Principal of any
         Series or Class of Securitization Bonds payable on the Final
         Maturity Date of such Series or Class, and any Principal of a
         Series or Class of Securitization Bonds payable on the Redemption
         Date for such Series or Class shall be allocated on a Pro Rata
         basis to the corresponding Series Subaccount;

                           (v) an amount equal to Principal scheduled to be
         paid on each Class of each Series of Securitization Bonds on such
         Payment Date according to the Expected Amortization Schedule,
         excluding any amounts provided for pursuant to clause (g)(iv)
         above, shall be allocated on a Pro Rata basis to the corresponding
         Series Subaccount;

                           (vi) all remaining unpaid Operating Expenses and
         Indemnity Amounts (excluding those paid pursuant to clause (d)
         above) and any termination or similar non-recurring payments under
         any Interest Rate Swap Agreement shall be paid to the Persons
         entitled thereto;

                           (vii) any amount necessary to replenish any
         shortfalls in the Capital Subaccount for each Series below the
         Required Capital Amount for such Series shall be allocated to the
         Capital Subaccount for such Series, Pro Rata, based on the Outstanding
         principal balance of each Series;

                           (viii) an amount shall be allocated to the
         Overcollateralization Subaccount for each Series sufficient to
         cause the amount in the Overcollateralization Subaccount for such
         Series to equal the Scheduled Overcollateralization Level for such
         Series as of that Payment Date, Pro Rata, based on the Outstanding
         principal balance of each Series;

                           (ix)   so long as no Event of Default has occurred
         and is continuing, an amount equal to investment earnings on amounts
         in the Capital Subaccount shall be released to the Issuer;

                           (x)    the balance, if any, shall be allocated to
         the Reserve Subaccount; and

                           (xi) following repayment of all outstanding
         Series of Securitization Bonds, the balance, if any, shall be
         released to the Issuer free from the Lien of this Indenture.

<PAGE>
                  (h) For purposes of allocations among Series prior to an
acceleration of the Securitization Bonds pursuant to Section 5.02, except
as otherwise provided in any Series Supplement, "Pro Rata" means with
respect to any Series a ratio, (i) in the case of a payment of Interest on
any Payment Date, the numerator of which is the amount of Interest payable
on such Series on such Payment Date which shall include, with respect to
any Class of such Series of floating rate Securitization Bonds, the Gross
Fixed Amount for that Class (as such term is defined by the related Series
Supplement) on such Payment Date and the denominator of which is the
aggregate amount of Interest payable on all Series on such Payment Date;
(ii) in the case of a payment of Principal on any Payment Date, the
numerator of which is the aggregate amount of Principal scheduled to be
paid or payable, as the case may be, on such Payment Date with respect to
such Series and the denominator of which is the sum of the aggregate
amounts of Principal scheduled to be paid or payable, as the case may be,
with respect to all Outstanding Series on such Payment Date; and (iii) in
the case of a payment or allocation on any Payment Date other than of
Interest or Principal, the numerator of which is the Outstanding principal
amount of such Series immediately prior to such Payment Date and the
denominator of which is the aggregate Outstanding principal amount of all
Series immediately prior to such Payment Date.

                  (i) If, on any Payment Date, funds on deposit in the
General Subaccount are insufficient to make the payments and allocations
contemplated by subclauses (d), (e), (f) and (g)(i) through (viii) above
for all Series, the Trustee shall, at the direction of the Servicer, draw
from amounts on deposit in the following subaccounts in the following order
up to the amount of such shortfall, in order to make such payments and
allocations:

                                    (i) from the Reserve Subaccount for all
                  Series, Pro Rata, for payments and allocations
                  contemplated by subclauses (d), (e), (f) and (g)(i)
                  through (v), (vii) and (viii),

                                    (ii) from the Overcollateralization
                  Subaccount for such Series, Pro Rata, for payments and
                  allocations contemplated by subclauses (d), (e), (f) and
                  (g)(i) through (v), and

                                    (iii) from the Capital Subaccount for
                  such Series, Pro Rata, for payments and allocations
                  contemplated by subclauses (d), (e), (f) and (g)(i)
                  through (v);

provided that no amounts from the Reserve Subaccount, the
Overcollateralization Subaccount for such Series or the Capital Subaccount
for such Series shall by allocated to any Class Subaccount pursuant to
subclause (g)(iii) to the extent a shortfall in amounts available to pay
interest due on the related Class of Securitization Bonds is due solely to
any failure by a Swap Counterparty to make payments due under the related
Interest Rate Swap Agreement.

                  (j) On each Payment Date for any Series prior to an
acceleration of the Securitization Bonds pursuant to Section 5.02, the
amounts on deposit in the Series Subaccount shall be allocated, at the
direction of the Servicer, in the following order of priority: (i) to pay
Interest due and payable on the Securitization Bonds of such Series with
respect to such Payment Date to the Holders of Securitization Bonds of such
Series, and (ii) the balance, if any, up to the amount of Principal
scheduled to be paid or payable on the Securitization Bonds of such Series
on such Payment Date, to pay such Principal to the Holders of
Securitization Bonds of such Series.

<PAGE>
                  (k) Prior to an acceleration of the Securitization Bonds
pursuant to Section 5.02, all allocations of Principal and Interest with
respect to any Series comprised of two or more Classes shall be allocated
among the Classes within such Series on a Pro Rata basis.

                  (l) For purposes of allocations among Classes within a
single Series prior to an acceleration of the Securitization Bonds pursuant
to Section 5.02, except as otherwise provided in any Series Supplement,
"Pro Rata" means with respect to any Class a ratio, (i) in the case of a
payment of Interest with respect to any Payment Date, the numerator of
which is the amount of interest payable to such Class on such Payment Date,
or in the case of any Class of floating rate Securitization Bonds, the
Gross Fixed Amount for that Class (as such term is defined by the related
Series Supplement) on such Payment Date, and the denominator of which is
the aggregate amount of Interest payable on all Classes within such Series
on such Payment Date; and (ii) in the case of a payment of Principal on any
Payment Date, the numerator of which is the aggregate amount of Principal
scheduled to be paid or payable, as the case may be, on such Payment Date
with respect to such Class and the denominator of which is the sum of the
aggregate amounts of Principal scheduled to be paid or payable, as the case
may be, with respect to all Outstanding Classes within such Series on such
Payment Date.

                  (m) Prior to an acceleration of the Securitization Bonds
pursuant to Section 5.02, all payments of Principal and Interest to Holders
of Securitization Bonds of a single Class, or of a single Series without
Classes, shall be made on a proportionate basis based on the respective
principal amounts of such Securitization Bonds held by such Holders.

                  (n) Upon an acceleration of the maturity of the
Securitization Bonds pursuant to Section 5.02, the aggregate amount of
principal of and interest accrued on each Securitization Bond shall be
payable, without priority of interest over principal or of principal over
interest and without regard to Series or Class, in the proportion that the
aggregate amount of principal of and interest accrued on such
Securitization Bond bears to the aggregate amount of principal of and
interest accrued on all Securitization Bonds.

                  (o) Notwithstanding any other provision in this Indenture
to the contrary, in the event of an acceleration of the Securitization
Bonds and a subsequent liquidation of the Collateral in accordance with
Section 5.04(a), if so provided in any Interest Rate Swap Agree ment, the
proceeds of such liquidation allocated to the related Class of floating
rate Securitization Bonds in accordance with this Section 8.03 shall be
deposited in the related Class Subaccount and allocated between and paid to
the Holders of such floating rate Class, on the one hand, and the related
Swap Counterparty, on the other hand, pro rata based on the aggregate
amount of principal and interest due and payable on such floating rate
Class and the aggregate amount payable to the related Swap Counterparty in
accordance with such Interest Rate Swap Agree ment.

                  SECTION 8.03 Release of Collateral. (a) All money and
other property withdrawn from the Collection Account by the Trustee for
payment to the Issuer as provided in this Indenture in accordance with
Section 8.02 shall be deemed released from this Indenture when so withdrawn
and applied in accordance with the provisions of Article VIII, without
further notice to, or release or consent by, the Trustee.

                  (b) Other than as provided for in clause (a) above, the
Trustee shall release property from the Lien of this Indenture only as and
to the extent permitted by the Basic Documents and only upon receipt of an
Issuer Request accompanied by an Issuer Officer's Certificate, an Issuer
Opinion of Counsel and Independent Certificates in accordance with TIA
Sections 314(c) and 314(d)(1) meeting the applicable requirements of
Section 11.01 or an Issuer Opinion of Counsel in lieu of such Independent
Certificates to the effect that the TIA does not require any such
Independent Certificate.

                  (c) Subject to the payment of its fees and expenses
pursuant to Section 6.07, the Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property
from the Lien of this Indenture, or convey the Trustee's interest in the
same, in a manner and under circumstances that are not inconsistent with
the provisions of this Indenture. No party relying upon an instrument
executed by the Trustee as provided in this Article VIII shall be bound to
ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.

<PAGE>
                  (d) Subject to Section 8.03(b), the Trustee shall, at
such time as there are no Securitization Bonds Outstanding and all sums due
the Trustee pursuant to Section 6.07 have been paid, release any remaining
portion of the Collateral that secured the Securitization Bonds from the
Lien of this Indenture and release to the Issuer or any other Person
entitled thereto any funds or investments then on deposit in or credited to
the Collection Account.

                  SECTION 8.04 Issuer Opinion of Counsel. The Trustee
shall receive at least five days notice when requested by the Issuer to
take any action pursuant to Section 8.03, accompanied by copies of any
instruments involved, and the Trustee shall also require, as a condition to
such action, an Issuer Opinion of Counsel, in form and substance
satisfactory to the Trustee, stating the legal effect of any such action,
outlining the steps required to complete the same, and concluding that all
conditions precedent to the taking of such action have been complied with
and such action will not materially and adversely impair the security for
the Securitization Bonds or the rights of the Securitization Bondholders in
contravention of the provisions of this Indenture; provided, however, that
such Issuer Opinion of Counsel shall not be required to express an opinion
as to the fair value of the Collateral. Counsel rendering any such opinion
may rely, without independent investigation, on the accuracy and validity
of any certificate or other instrument delivered to the Trustee in
connection with any such action.

                  SECTION 8.05 Reports by Independent Accountants. The
Issuer shall appoint a firm of Independent certified public accountants of
recognized national reputation, subject to the approval of the Trustee, for
purposes of preparing and delivering the reports or certificates of such
accountants required by this Indenture and the related Series Supplements.
Upon any resignation by such firm, the Issuer shall promptly appoint a
successor thereto that shall also be a firm of Independent certified public
accountants of recognized national reputation. If the Issuer shall fail to
appoint a successor to a firm of Independent certified public accountants
that has resigned within 30 days after such resignation, the Trustee shall
promptly notify the Issuer of such failure in writing. If the Issuer shall
not have appointed a successor within ten (10) days thereafter, the Trustee
shall promptly appoint a successor firm of Independent certified public
accountants of recognized national reputation. The fees of such firm of
Independent certified public accountants and its successor shall be payable
by the Issuer.


                                 ARTICLE IX

                          Supplemental Indentures

                  SECTION 9.01 Supplemental Indentures Without Consent of
Securitiza tion Bondholders. (a) Without the consent of the Holders of any
Securitization Bonds or the counterparty under any Interest Rate Swap
Agreement but with prior notice to the Rating Agencies, the Issuer and the
Trustee, when authorized by an Issuer Order, at any time and from time to
time, may enter into one or more indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act as in force at
the date of the execution thereof), in form satisfactory to the Trustee,
for any of the following purposes:

<PAGE>
                           (i) to correct or amplify the description of the
         Collateral, or better to assure, convey and confirm unto the
         Trustee the Collateral, or to subject to the Lien of this
         Indenture additional property;

                           (ii) to evidence the succession, in compliance
         with the applicable provisions hereof, of another Person to the
         Issuer, and the assumption by any applicable successor of the
         covenants of the Issuer contained herein and in the Securitization
         Bonds;

                           (iii) to add to the covenants of the Issuer, for
         the benefit of the Securiti zation Bondholders, or to surrender
         any right or power herein conferred upon the Issuer;

                           (iv)  to convey, transfer, assign, mortgage or
         pledge any property to the Trustee;

                           (v) to cure any ambiguity, to correct or
         supplement any provision herein or in any Supplemental Indenture
         which may be inconsistent with any other provision herein or in
         any Supplemental Indenture or to make any other provisions with
         respect to matters or questions arising under this Indenture or in
         any Supplemental Indenture consistent with other provisions of the
         Basic Documents or less ambiguous; provided, however, that (i)
         such action shall not, as evidenced by an Issuer Opinion of
         Counsel, adversely affect in any material respect the interests of
         any Securitization Bondholder or any counterparty under any
         Interest Rate Swap Agreement and (ii) the Rating Agency Condition
         shall have been satisfied with respect thereto;

                           (vi) to evidence and provide for the acceptance
         of the appointment hereunder by a successor Trustee with respect
         to the Securitization Bonds and to add to or change any of the
         provisions of this Indenture as shall be necessary to facilitate
         the administration of the trusts hereunder by more than one
         Trustee, pursuant to the require ments of Article VI;

                           (vii) to modify, eliminate or add to the
         provisions of this Indenture to such extent as shall be necessary
         to effect the qualification of this Indenture under the TIA or
         under any similar federal statute hereafter enacted and to add to
         this Indenture such other provisions as may be expressly required
         by the TIA;

                           (viii) to set forth the terms of any Series that
         has not theretofore been authorized by a Supplemental Indenture,
         provided that the Rating Agency Condition has been satisfied;

                           (ix) to provide for any Interest Rate Swap
         Agreements with respect to any Series or Class of Securitization
         Bonds which bears a floating rate of interest or any Series or
         Class with specified credit enhancement; provided, however, that:

                                    (A) such action shall not, as evidenced
                  by an Opinion of Counsel, adversely affect in any
                  material respect the interests of any Securitiza tion
                  Bondholder or any counterparty under any Interest Rate
                  Swap Agreement and
<PAGE>

                                    (B) the Rating Agency Condition shall have
                  been satisfied with respect thereto; or

                           (x) to authorize the appointment of any listing
         agent, transfer agent or paying agent or additional registrar for
         any Class of any Series of Securitization Bonds required or
         advisable in connection with the listing of any Class or any
         Series of Securiti zation Bonds on the Luxembourg Stock Exchange
         or any other stock exchange, and otherwise to amend this Indenture
         to incorporate any changes requested or required by any
         governmental authority, stock exchange authority, listing agent,
         transfer agent or paying agent or additional registrar for any
         Class of any Series of Securitization Bonds in connection with
         that listing.

                  (b) The Trustee is hereby authorized to join in the
execution of any such Supplemental Indenture and to make any further
appropriate agreements and stipulations that may be therein contained.

                  SECTION 9.02 Supplemental Indentures with Consent of
Securitization Bondholders. (a) The Issuer and the Trustee, when authorized
by an Issuer Order, also may, upon satisfaction of the Rating Agency
Condition (in each case, accompanied by the form of the proposed
supplemental indenture) and with the consent of the Holders of not less
than a majority of the Outstanding Amount of the Securitization Bonds of
each Series or Class to be affected, by Act of such Holders delivered to
the Issuer and the Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this
Indenture or of modifying in any manner the rights of the Holders of the
Securitization Bonds under this Indenture; provided, however, that no such
Supplemental Indenture shall, without the consent of the Holder of each
Outstanding Securitiza tion Bond of each Series or Class and each
counterparty under any Interest Rate Swap affected thereby:

                           (i) change the date of payment of any instalment
         of principal of or interest on any Securitization Bond, or reduce
         the principal amount thereof, the interest rate thereon or the
         redemption price with respect thereto, change the provisions of
         any Interest Rate Swap Agreement relating to the amount,
         calculation or timing of payments, change the provisions of this
         Indenture and the related applicable Supplemental Indenture or
         Series Supplement relating to the application of collections on,
         or the proceeds of the sale of, the Collateral to payment of
         principal of or interest on the Securitization Bonds, or change
         the currency in which, any Securitization Bond or the interest
         thereon is payable;

                           (ii) impair the right to institute suit for the
         enforcement of the provi sions of this Indenture requiring the
         application of funds available therefor, as provided in Article V,
         to the payment of any such amount due on the Securitization Bonds
         on or after the respective due dates thereof (or, in the case of
         redemption, on or after the Redemption Date);

                           (iii) reduce the percentage of the Outstanding
         Amount of the Securiti zation Bonds or of a Series or Class
         thereof, the consent of the Holders of which is required for any
         such Supplemental Indenture, or the consent of the Holders of
         which is required for any waiver of compliance with provisions of
         this Indenture or defaults hereunder and their consequences
         provided for in this Indenture or modify or alter the provisions
         of the proviso to the definition of the term "Outstanding";

                           (iv) reduce the percentage of the Outstanding
         Amount of the Securiti zation Bonds required to direct the Trustee
         to direct the Issuer to sell or liquidate the Collateral pursuant
         to Section 5.04 or to preserve the Collateral pursuant to Section
         5.05;

<PAGE>
                           (v) reduce the percentage of the Outstanding
         Amount of a Series or Class of Securitization Bonds, the consent
         of the Holders of which is required for any amendments to the Sale
         Agreement, the Administration Agreement, the Servicing Agreement
         or any Interest Rate Swap Agreement;

                           (vi) modify any of the provisions of this
         Indenture in such manner so as to affect the amount of any payment
         of interest or principal payable on any Securitization Bond on any
         Payment Date or change the Redemption Dates, Expected Amortization
         Schedules or Final Maturity Date of any Series or Class of
         Securitization Bonds, or the method of calculation of interest on
         any floating rate Securitization Bonds;

                           (vii) decrease the Overcollateralization Amount
         or Required Capital Amount with respect to any Series or the
         Scheduled Overcollateralization Level with respect to any Payment
         Date;

                           (viii) modify or alter the provisions of this
         Indenture regarding the voting of Securitization Bonds held by the
         Issuer, the Seller, an Affiliate of either of them or any obligor
         on the Securitization Bonds;

                           (ix) decrease the percentage of the aggregate
         principal amount of Securitization Bonds required to amend the
         sections of this Indenture which specify the applicable percentage
         of the aggregate principal amount of the Securitization Bonds
         necessary to amend this Indenture or any other Basic Document; or

                           (x) permit the creation of any Lien ranking
         prior to or on a parity with the Lien of this Indenture with
         respect to any part of the Collateral or, except as otherwise
         permitted or contemplated herein, terminate the Lien of this
         Indenture on any property at any time subject hereto or deprive
         the Holder of any Securitization Bond of the security provided by
         the Lien of this Indenture.

                  (b) It shall not be necessary for any Act of
Securitization Bondholders under this Section 9.02 to approve the
particular form of any proposed Supplemental Indenture, but it shall be
sufficient if such Act shall approve the substance thereof.

                  (c) Promptly after the execution by the Issuer and the
Trustee of any Supple mental Indenture pursuant to this Section 9.02, the
Trustee shall mail to the Holders of the Securitization Bonds to which such
amendment or Supplemental Indenture relates a notice setting forth in
general terms the substance of such Supplemental Indenture. Any failure of
the Trustee to mail such notice, or any defect therein, shall not, however,
in any way impair or affect the validity of any such Supplemental
Indenture. If any Securitization Bonds are listed on the Luxembourg Stock
Exchange and the rules of such exchange so require, the Trustee shall
arrange for publication an Authorized Newspaper that such notice shall be
available with the Issuer's listing agent in Luxembourg appointed pursuant
to Section 3.02(b).

                  SECTION 9.03 Execution of Supplemental Indentures. In
executing, or permitting the additional trusts created by, any Supplemental
Indenture permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled to receive,
and subject to Sections 6.01 and 6.02, shall be fully protected in relying
upon, an Issuer Opinion of Counsel stating that the execution of such
Supplemental Indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such
Supplemental Indenture that affects the Trustee's own rights, duties,
liabilities or immunities under this Indenture or otherwise.

<PAGE>
                  SECTION 9.04 Effect of Supplemental Indenture. Upon the
execution of any Supplemental Indenture pursuant to the provisions hereof,
this Indenture shall be and be deemed to be modified and amended in
accordance therewith with respect to each Series or Class of Securitization
Bonds affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Trustee, the Issuer, the Holders of the Securitization Bonds and any
counterparty under any Interest Rate Swap Agreement shall thereafter be
determined, exercised and enforced hereunder subject in all respects to
such modifications and amendments, and all the terms and conditions of any
such Supplemental Indenture shall be and be deemed to be part of the terms
and conditions of this Indenture for any and all purposes.

                  SECTION 9.05 Conformity with Trust Indenture Act. Every
amendment of this Indenture and every Supplemental Indenture executed
pursuant to this Article IX shall conform to the requirements of the TIA as
then in effect so long as this Indenture shall then be qualified under the
TIA.

                  SECTION 9.06 Reference in Securitization Bonds to
Supplemental Indentures. Securitization Bonds authenticated and delivered
after the execution of any Supplemental Indenture pursuant to this Article
IX may, and if required by the Trustee shall, bear a notation in form
approved by the Trustee as to any matter provided for in such Supplemental
Indenture. If the Issuer or the Trustee shall so determine, new
Securitization Bonds so modified as to conform, in the opinion of the
Trustee and the Issuer, to any such Supplemental Indenture may be prepared
and executed by the Issuer and authenticated and delivered by the Trustee
in exchange for Outstanding Securitization Bonds.

                                 ARTICLE X

                     Redemption of Securitization Bonds

                  SECTION 10.01 Optional Redemption by Issuer. If so
provided in the related Series Supplement and provided that there is no
Interest Rate Swap Agreement with respect to any Class of that Series in
effect, the Issuer may, at its option, redeem all, but not less than all,
of the Securitization Bonds of a Series on any Payment Date if, after
giving effect to payments that would otherwise be made on such Payment
Date, the Outstanding Amount of any such Series of Securitization Bonds has
been reduced to less than five percent (5%) of the initial principal
balance of such Series. The redemption price in any case shall be equal to
the outstanding principal amount of the Bonds to be redeemed plus accrued
and unpaid interest thereon at the Interest Rate to the Redemption Date
(the "Redemption Price"). If the Issuer elects to redeem the Securitization
Bonds of a Series pursuant to this Section 10.01, it shall furnish notice
of such election to (a) the Trustee, not later than twenty-five (25) days
prior to the Redemption Date for such redemption and (b) to the Rating
Agencies, not later than ten (10) days prior to such Redemption Date,
whereupon all such Securitization Bonds shall be due and payable on such
Redemption Date upon the furnishing of a notice complying with Section
10.03 to each Holder of the Securitization Bonds of such Series pursuant to
this Section 10.01.

                  SECTION 10.02 Mandatory Redemption by Issuer. The Issuer
shall redeem the Securitization Bonds of a Series on the Redemption Date or
Dates, if any, in the amounts required, if any, and at the redemption price
specified in the Series Supplement for such Series, which in any case shall
be not less than the outstanding principal amount of the Bonds to be
redeemed, plus accrued interest thereon to such Redemption Date. If the
Issuer is required to redeem the Securitization Bonds of a Series pursuant
to this Section 10.02, it shall furnish notice of such requirement to the
Trustee not later than twenty-five (25) days prior to the Redemption Date
for such redemption whereupon all such Securitization Bonds shall be due
<PAGE>
and payable on the Redemption Date upon the furnishing of a notice
complying with Section 10.03 to each Holder of the Securitization Bonds of
such Series pursuant to this Section 10.02.

                  SECTION 10.03 Form of Redemption Notice. (a) Unless
otherwise specified in the Series Supplement relating to a Series of
Securitization Bonds, notice of redemption under Sections 10.01 or 10.02
shall be given by the Trustee by first-class mail, postage prepaid, mailed
not less than five days nor more than forty-five (45) days prior to the
applicable Redemption Date to each Holder of Securitization Bonds to be
redeemed, as of the close of business on the Record Date preceding the
applicable Redemption Date at such Holder's address appearing in the
Securitization Bond Register.

                  (b)      All notices of redemption shall state:

                           (i)      the Redemption Date;

                           (ii)     the amount of such Securitization Bonds
                  to be redeemed;

                           (iii)    the Redemption Price; and

                           (iv) the place where such Securitization Bonds
                  are to be surrendered for payment of the Redemption Price
                  and accrued interest (which shall be the office or agency
                  of the Issuer to be maintained as provided in Section
                  3.02).

                  (c) Notice of redemption of the Securitization Bonds to
be redeemed shall be given by the Trustee in the name and at the expense of
the Issuer. For so long as any Securitiza tion Bonds are listed on the
Luxembourg Stock Exchange and the rules of such exchange so require, the
Trustee shall arrange that such notice will also be given by publication in
an Authorized Newspaper at least ten (10) days prior to the Redemption
Date. Failure to give notice of redemption, or any defect therein, to any
Holder of any Securitization Bond selected for redemption shall not impair
or affect the validity of the redemption of any other Securitization Bond.
Notice of optional redemption shall be irrevocable once given.

                  SECTION 10.04 Payment of Redemption Price. If notice of
redemption has been duly mailed or duly waived by the Holders of all
Securitization Bonds called for redemp tion, then the Securitization Bonds
called for redemption shall be payable on the applicable Redemption Date at
the applicable Redemption Price. No further interest will accrue on the
principal amount of any Securitization Bonds called for redemption after
the Redemption Date, and the Holders of such Securitization Bonds will have
no rights with respect thereto, if payment of the Redemption Price has been
duly provided for on or before the Redemption Date declared therefor.
Notwithstanding the foregoing, the Holders of the Securitization Bonds
shall be entitled to payment of interest on the Redemption Price accrued at
the related Interest Rates to the extent the Issuer fails to pay the
Redemption Price on the Redemption Date declared therefor. Payment of the
Redemption Price shall be made by the Trustee to or upon the order of the
Holders of the Securitization Bonds called for redemption upon surrender of
such Securitization Bonds, and the Securitization Bonds so redeemed shall
cease to be of further effect and the Lien hereunder shall be released with
respect to such Securitization Bonds.

<PAGE>
                                 ARTICLE XI

                               Miscellaneous

                  SECTION 11.01 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Trustee to take
any action under any provision of this Indenture, the Issuer shall furnish
to the Trustee (i) an Issuer Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with, (ii) an Issuer Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with and (iii) (if required by the
TIA) an Independent Certificate from a firm of certified public accountants
meeting the applicable requirements of this Section 11.01, except that, in
the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished.

                  (b) Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture
shall include:

                           (i) a statement that each signatory of such
                  certificate or opinion has read or has caused to be read
                  such covenant or condition and the definitions herein
                  relating thereto;

                           (ii)     a brief statement as to the nature and
                  scope of the examination or investigation upon which the
                  statements or opinions contained in such certificate
                  or opinion are based;

                           (iii) a statement that, in the opinion of each
                  such signatory, such signatory has made such examination
                  or investigation as is necessary to enable such signatory
                  to express an informed opinion as to whether or not such
                  covenant or condition has been complied with; and

                           (iv) a statement as to whether, in the opinion
                  of each such signatory, such condition or covenant has
                  been complied with.

                  SECTION 11.02 Form of Documents Delivered to Trustee. (a)
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one
such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some
matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or
several documents.

                  (b) Any certificate or opinion of an Authorized Officer
of the Issuer may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon
which his certificate or opinion is based are erroneous. Any such
certificate of an Authorized Officer or Issuer Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Servicer,
the Seller or the Issuer, stating that the information with respect to such
factual matters is in the possession of the Servicer, the Seller or the
Issuer, unless such Authorized Officer or counsel knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.

                  (c) Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but need not,
be consolidated and form one instrument.
<PAGE>

                  (d) Whenever in this Indenture, in connection with any
application or certificate or report to the Trustee, it is provided that
the Issuer shall deliver any document as a condition of the granting of
such application, or as evidence of the Issuer's compliance with any term
hereof, it is intended that the truth and accuracy, at the time of the
granting of such application or at the effective date of such certificate
or report (as the case may be), of the facts and opinions stated in such
document shall in such case be conditions precedent to the right of the
Issuer to have such application granted or to the sufficiency of such
certificate or report. The foregoing shall not, however, be construed to
affect the Trustee's right to rely upon the truth and accuracy of any
statement or opinion contained in any such document as provided in Article
VI.

                  SECTION 11.03 Acts of Securitization Bondholders. (a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Securitization
Bondholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securitization Bond holders in
person or by agents duly appointed in writing; and except as herein
otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Trustee, and, where it is
hereby expressly required, to the Issuer. Such instru ment or instruments
(and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Securitization Bondholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive
in favor of the Trustee and the Issuer, if made in the manner provided in
this Section 11.03.

                  (b) The fact and date of the execution by any person of
any such instrument or writing may be proved in any manner that the Trustee
deems sufficient.

                  (c) The ownership of Securitization Bonds shall be proved by
the Securitization Bond Register.

                  (d) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any Securitization
Bonds shall bind the Holder of every Securitiza tion Bond issued upon the
registration thereof or in exchange therefor or in lieu thereof, in respect
of anything done, omitted or suffered to be done by the Trustee or the
Issuer in reliance thereon, whether or not notation of such action is made
upon such Securitization Bond.

                  SECTION 11.04 Notices, etc., to Trustee, Issuer and
Rating Agencies. (a) Any request, demand, authorization, direction, notice,
consent, waiver or Act of Securitization Bondholders or other documents
provided or permitted by this Indenture to be made upon, given or furnished
to or filed with:

                  (i)      the Trustee by any Securitization Bondholder or
           by the Issuer, or

                  (ii)     the Issuer by the Trustee or by any Securitization
           Bondholder,

shall be sufficient for every purpose hereunder if in English and in
writing, and sent 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 request,
demand, authorization, direction, notice, consent, waiver or Act 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, in the case of the Trustee, addressed to the
Trustee at its Corporate Trust Office at: The Bank of New York, Asset Backed
Securities (ABS), 5 Penn Plaza, 16th Floor, New York, New York 10001-1803,
and in the case of the Issuer, addressed to: Consumers Funding LLC, 212 W.
Michigan Avenue, Suite M-1029, Jackson, Michigan 49201, Attention: Managers,
or at any other address previously furnished in writing to the Trustee by
the Issuer. The Issuer shall promptly transmit any notice received by it
from the Securitization Bondholders to the Trustee.

                  (b) Notices required to be given to the Rating Agencies
by the Issuer, the Trustee or a Manager shall be in writing, delivered
personally, via facsimile transmission, by reputable overnight courier or
by first-class mail, postage prepaid, to: (i) in the case of Moody's:
Moody's Investors Service, Inc., Attention: ABS Monitoring Department, 99
Church Street, New York, New York 10007; (ii) in the case of Standard &
Poor's: Standard & Poor's Corporation, 55 Water Street, New York, NY 10041,
Attention: Asset Backed Surveillance Department and (iii) in the case of
Fitch: Fitch, Inc., 1 State Street Plaza, New York, New York 10004,
Attention: ABS Surveillance.

                  SECTION 11.05 Notices to Securitization Bondholders;
Waiver. (a) Where this Indenture provides for notice to Securitization
Bondholders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and delivered by
first-class mail, postage prepaid, to each Securitization Bondholder
affected by such event, at the address of such Securitization Bondholder as
it appears on the Securitization Bond Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of
such notice. In any case where notice to Securitization Bondholders is
given by mail, neither the failure to mail such notice nor any defect in
any notice so mailed to any particular Securitization Bondholder shall
affect the sufficiency of such notice with respect to other Securitization
Bondholders, and any notice that is mailed in the manner herein provided
shall conclusively be presumed to have been duly given.
<PAGE>

                  (b) Where this Indenture provides for notice in any
manner, such notice may be waived in writing by any Person entitled to
receive such notice, either before or after the event, and such waiver
shall be the equivalent of such notice. Waivers of notice by Securitiza
tion Bondholders shall be filed with the Trustee but such filing shall not
be a condition precedent to the validity of any action taken in reliance
upon such a waiver.

                  (c) In case it shall be impractical to deliver notice in
accordance with clause (a) of this Section 11.05 to the Holders of
Securitization Bonds when such notice is required to be given pursuant to
any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient
giving of such notice.

                  (d) Where this Indenture provides for notice to the
Rating Agencies, failure to give such notice shall not affect any other
rights or obligations created hereunder, and shall not under any
circumstance constitute a Default or Event of Default.

                  SECTION 11.06 Notices to Luxembourg Stock Exchange. (a)
For so long as any Securitization Bonds are listed on the Luxembourg Stock
Exchange and to the extent the rules of such exchange so require, the
Issuer shall notify the Luxembourg Stock Exchange and any agent appointed
pursuant to Section 3.02(b) if any rating assigned to such Securitization
Bonds is reduced or withdrawn and shall arrange for such notice to be
published in an Autho rized Newspaper.

                  (b) For so long as any Securitization Bonds are listed on
the Luxembourg Stock Exchange and the rules of such exchange so require,
the Trustee shall make available to the Holders of such Securitization
Bonds and shall deposit on file with the Issuer's listing agent in
Luxembourg appointed pursuant to Section 3.02(b), copies of the Basic
Documents, all reports provided to Securitization Bondholders pursuant to
this Indenture, the prospectus related to such Securitization Bonds, the
reports of independent certified public accountants obtained with respect
to the Issuer pursuant to this Indenture, the financial information
regarding Consumers in its annual report on Form 10-K for the fiscal year
ended December 31, 2000 and copies of each annual report of Consumers on
Form 10-K for subsequent fiscal years. The Trustee shall deposit with the
Chief Registrar of the District Court of Luxembourg prior to listing on the
Luxembourg Stock Exchange a copy of the Issuer Certificate of Formation,
the Issuer LLC Agreement and any legal notices relating to the issuance of
such Securitization Bonds.

                  SECTION 11.07 Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the
Securitization Bonds to the contrary, the Issuer may enter into any
agreement with any Holder of a Securitization Bond providing for a method
of payment, or notice by the Trustee or any Paying Agent to such Holder,
that is different from the methods provided for in this Indenture for such
payments or notices. The Issuer will furnish to the Trustee a copy of each
such agreement and the Trustee will cause payments to be made and notices
to be given in accordance with such agreements.

                  SECTION 11.08 Conflict with Trust Indenture Act. (a) If
any provision hereof limits, qualifies or conflicts with another provision
hereof that is required to be included in this Indenture by any of the
provisions of the TIA, such required provision shall control.

                  (b) The provisions of TIA Sections 310 through 317 that
impose duties on any Person (including the provisions automatically deemed
included herein unless expressly excluded by this Indenture) are a part of
and govern this Indenture, whether or not physically contained herein.

                  SECTION 11.09 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
<PAGE>

                  SECTION 11.10 Successors and Assigns. (a) All covenants
and agreements in this Indenture and the Securitization Bonds by the Issuer
shall bind its successors and permitted assigns, whether so expressed or
not.

                  (b)      All agreements of the Trustee in this Indenture
shall bind its successors.

                  (c) The Trustee shall provide prior notice to the Rating
Agencies of any assignment of the obligations under this Agreement.

                  SECTION 11.11 Severability. In case any provision in this
Indenture or in the Securitization Bonds shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

                  SECTION 11.12 Benefits of Indenture. Nothing in this
Indenture or in the Securitization Bonds, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder,
and the Securitization Bondholders, and any other party secured hereunder,
and any other Person with an ownership interest in any part of the
Collateral, any benefit or any legal or equitable right, remedy or claim
under this Indenture.

                  SECTION 11.13 Legal Holidays. In any case where the date
on which any payment is due shall not be a Business Day, then
(notwithstanding any other provision of the Securitization Bonds or this
Indenture) payment need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if made on
the date on which nominally due, and no interest shall accrue for the
period from and after any such nominal date.

                  SECTION 11.14 GOVERNING LAW. THIS INDENTURE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
MICHIGAN, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVI SIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERE UNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                  SECTION 11.15 Counterparts. This Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.

                  SECTION 11.16 Issuer Obligation. No recourse may be
taken, directly or indirectly, with respect to the obligations of the
Issuer or the Trustee on the Securitization Bonds or under this Indenture
or any certificate or other writing delivered in connection herewith or
therewith, against (i) the Member or any Manager, employee or agent of the
Issuer or (ii) any stockholder, officer, director, employee or agent of the
Trustee (it being understood that none of the Trustee's obligations are in
its individual capacity).

                  SECTION 11.17 No Petition. The Trustee, by entering into
this Indenture, and each Securitization Bondholder, by accepting a
Securitization Bond, hereby covenants and agrees (or shall be deemed to
have covenanted and agreed) that it shall not at any time institute against
the Issuer, or join in the institution against the Issuer of, or 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.
<PAGE>

                  SECTION 11.18 Intercreditor Agreement. The Trustee is
hereby authorized, at the request of the Issuer, to execute and deliver
additional intercreditor agreements pursuant to Section 18(b) of the
Initial Intercreditor Agreement subject only to the satisfaction of the
Rating Agency Condition and receipt by the Trustee of the Opinion of
Counsel referenced in such Section 18(b). Each Intercreditor Agreement
shall be binding on the Securitization Bondholders.


                  IN WITNESS WHEREOF, the Issuer and the Trustee have
caused this Indenture to be duly executed and delivered by an officer
thereof, each thereunto duly authorized, all as of the day and year first
above written.


                                 CONSUMERS FUNDING LLC,
                                      as Issuer


                                 By: /s/ Laura L. Mountcastle
                                     ---------------------------------
                                     Name:  Laura L. Mountcastle
                                     Title: President, Chief Executive Officer,
                                            Chief Financial Officer and
                                            Treasurer



                                 THE BANK OF NEW YORK,
                                      as Trustee



                                 By: /s/ Cassandra D. Shedd
                                     -----------------------------------------
                                       Name:  Cassandra D. Shedd
                                       Title: Assistant Vice President



                                 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 Securiti zation Bonds are
         outstanding, the first day of the first billing cycle of the
         Servicer in March, June, September and December of each year,
         beginning with the billing cycle for December 2014.

         Adjustment Request means an application filed by the Servicer with
         the MPSC for a Securitization Charge Adjustment pursuant to
         Section 5 of the Issuer Annex.

         Administration Agreement means the Administration Agreement dated
         as of November 8, 2001, between Consumers, as administrator, and
         the Issuer, as the same may be amended or supplemented from time
         to time.
<PAGE>

         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 Financ ing
         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,
         the Intercreditor Agreement, any Bills of Sale, the Servicing
         Agreement, the Administration Agreement, the Indenture, the
         Underwriting Agreement, the Securities Account Control Agreement
         and any Interest Rate Swap Agreement, as each may be amended or
         supplemented from time to time.

         Bill of Sale means any bill of sale issued by the Seller to the
         Issuer pursuant to the Sale Agreement evidencing the sale of
         Securitization Property by the Seller to the Issuer.

         Billing Month means the schedule for current month billings (each
         billing month includes 21 billing segments regardless of the
         number of days in the current calendar month). For uniformity of
         customer billings, each customer's meter is read every 27 to 33
         days and billed in one of the 21 monthly billing segments.
<PAGE>

         Book-Entry Securitization Bonds means beneficial interests in the
         Securitization Bonds, ownership and transfers of which shall be
         made through book entries by a Clearing Agency as described in
         Section 2.11 of the Indenture.

         Business Day means any day other than a Saturday or Sunday or a
         day on which banking institutions in the City of Jackson,
         Michigan, or in the City of New York, New York or, with respect to
         any Securitization Bonds listed on the Luxembourg Stock Exchange,
         in Luxembourg, are required or authorized by law or executive
         order to remain closed.

         Calculation Date means the day which is a Business Day at least 45
         days before each Adjustment Date on which the Servicer files an
         Adjustment Request.

         Capital Reserve Subaccount has the meaning specified in Section
         8.02(a) of the Inden ture.

         Capital Subaccount has the meaning specified in Section 8.02(a) of
         the Indenture.

         Class means, with respect to any Series, any one of the classes of
         Securitization Bonds of that Series, as specified in the Series
         Supplement for that Series.

         Class Subaccount has the meaning specified in Section 8.02(a) of
         the Indenture.

         Clearing Agency means an organization registered as a "clearing
         agency" pursuant to Section 17A of the Exchange Act.

         Clearing Agency Participant means a broker, dealer, bank, other
         financial institution or other Person for whom from time to time a
         Clearing Agency effects book-entry transfers and pledges of
         securities deposited with the Clearing Agency.

         Code means the Internal Revenue Code of 1986, as amended from time
         to time, and the treasury regulations promulgated thereunder.

         Collateral has the meaning specified in the Granting Clause of the
         Indenture.

         Collection Account has the meaning specified in Section 8.02(a) of
         the Indenture.

         Collection Curve means, with respect to a Billing Month, the
         forecast prepared by the Servicer of the percentages of amounts
         billed in a Billing Month that are expected to be received during
         each of the Billing Months for which the Collection Curve
         Percentage will be applied to determine the amount of
         Securitization Charges collected.

         Collection Curve Percentage means the percentages of amounts
         billed in a particular Billing Month that are expected to be
         received during that month. The initial Collection Curve
         Percentages are:

            First Billing Month's Collection Curve Percentage:    40.08%
            Second Billing Month's Collection Curve Percentage:   45.09%
            Third Billing Month's Collection Curve Percentage:    10.58%

         provided that the Collection Curve Percentages will be updated by
         Consumers periodi cally while the Securitization Bonds are
         outstanding using similar methodology.

         Commission means the U.S. Securities and Exchange Commission, and
         any successor thereof.
<PAGE>

         Consumers means Consumers Energy Company, a Michigan corporation.

         Corporate Trust Office means the principal office of the Trustee
         at which at any particu lar time its corporate trust business
         shall be administered, which office at date of the execution of
         this Indenture is located at 5 Penn Plaza-16th floor, New York,
         New York 10001-1803, Attention: Corporate Trust-Asset Backed
         Securities (ABS), or at such other address as the Trustee may
         designate from time to time by notice to the Securitization
         Bondholders and the Issuer, or the principal corporate trust
         office of any successor Trustee (the address of which the
         successor Trustee will notify the Securitization Bondholders and
         the Issuer in writing).

         Covenant Defeasance Option has the meaning specified in Section
         4.01(b) of the Indenture.

         Customers means all electric customers taking delivery of
         electricity from Consumers or its successor on its MPSC-approved
         rate schedules and special contracts.

         Customer Choice Act means the Customer Choice and Electricity
         Reliability Act as set forth in Michigan Public Acts 2000 PA 141
         and 2000 PA 142 and effective on June 5, 2000.

         Daily Remittance Date means, if the Servicer has not satisfied the
         conditions of Section 5.11(b) of the Servicing Agreement, each
         Business Day commencing on the second Business Day following the
         date on which the Servicer ceases to satisfy such conditions.

         Default means any occurrence that is, or with notice or the lapse
         of time or both would become, an Event of Default.

         Defeasance Subaccount has the meaning specified in Section 8.02(a)
         of the Indenture.

         Definitive Securitization Bonds has the meaning specified in
         Section 2.11 of the Inden ture.

         Delaware UCC means the Uniform Commercial Code, as in effect in
         the State of Delaware, as amended from time to time.

         DTC Agreement means the agreement between the Issuer, the Trustee
         and The Depository Trust Company, as the initial Clearing Agency,
         dated on or about November 8, 2001, relating to the Securitization
         Bonds, as the same may be amended or supplemented from time to
         time.

         Eligible Guarantor Institution means a firm or other entity
         identified in Rule 17Ad-15 under the Exchange Act as "an eligible
         guarantor institution," including (as such terms are defined
         therein):

                  (a)      a bank;

<PAGE>
                  (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 associa tion.

         Eligible Institution means:

                  (a)      the corporate trust department of the Trustee,
                           so long as any of the securi ties of the Trustee
                           have a credit rating from each Rating Agency in
                           one of its generic rating categories which
                           signifies investment grade, or

                  (b)      a depositary institution organized under the
                           laws of the United States of America or any
                           State (or any domestic branch of a foreign
                           bank), which

                           (i)      has either

                                    (A)     with respect to any Eligible
                                            Investment having a maturity of
                                            greater than one month, a
                                            long-term unsecured debt rating
                                            of "AA-" by Standard & Poor's
                                            and Fitch and "Aa3" by Moody's,
                                            or

                                    (B)     with respect to any Eligible
                                            Investment having a maturity
                                            one month or less, a
                                            certificate of deposit rating
                                            of "A-1+" by Standard & Poor's,
                                            "P-1" by Moody's and "F1+" by
                                            Fitch, or any other long-term,
                                            short-term or certificate of
                                            deposit rating acceptable to
                                            the Rating Agencies, and

                           (ii)     whose deposits are insured by the FDIC.

         Eligible Investments mean book-entry securities, negotiable
         instruments or securities represented by instruments in bearer or
         registered form which evidence:

                  (a)      direct obligations of, and obligations fully and
                           unconditionally guaranteed as to timely payment
                           by, the United States of America;

<PAGE>
                  (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 exami nation by Federal or State
                           banking or depositary institution authorities;
                           provided, however, that at the time of the
                           investment or contractual commitment to invest
                           therein, the commercial paper or other
                           short-term unsecured debt obligations (other
                           than such obligations the rating of which is
                           based on the credit of a Person other than such
                           depositary institution or trust company) thereof
                           shall have a credit rating from each of the
                           Rating Agencies in the highest investment
                           category granted thereby;

                  (c)      commercial paper or other short term obligations
                           of any corporation organized under the laws of
                           the United States of America (other than
                           Consumers) whose ratings, at the time of the
                           investment or contractual commitment to invest
                           therein, from each of the Rating Agencies are in
                           the highest investment category granted thereby;

                  (d)      investments in money market funds having a
                           rating from each of the Rating Agencies in the
                           highest investment category granted thereby
                           (including funds for which the Trustee or any of
                           its Affiliates act as investment manager or
                           advisor);

                  (e)      bankers' acceptances issued by any depositary
                           institution or trust company referred to in
                           clause (b) above;

                  (f)      repurchase obligations with respect to any
                           security that is a direct obliga tion 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) de scribed in clause (b) above;

                  (g)      repurchase obligations with respect to any
                           security or whole loan entered into with

<PAGE>
                           (i)      a financial institution (acting as
                                    principal) described in clause (b)
                                    above,

                           (ii)     a broker/dealer (acting as principal)
                                    registered as a broker or dealer under
                                    Section 15 of the Exchange Act (any
                                    broker/dealer being referred to in this
                                    definition as a "broker/dealer"), the
                                    unsecured short-term debt obligations
                                    of which are rated P-1 by Moody's, A-1+
                                    by Standard & Poor's and F1+ by Fitch
                                    at the time of enter ing into this
                                    repurchase obligation, or

                           (iii)    an unrated broker/dealer, acting as
                                    principal, that is a wholly-owned
                                    subsidiary of a non-bank or bank
                                    holding company the unsecured
                                    short-term debt obligations of which
                                    are rated P-1 by Moody's, A-1+ by
                                    Standard & Poor's and F1+ by Fitch at
                                    the time of purchase; or

                  (h)      any other investment permitted by each Rating
                           Agency;

         provided, however, that, with respect to Moody's only, the obligor
         related to clauses (b), (c), (e), (f) and (g) above must have both
         a long term rating of at least A1 and a short term rating of at
         least P-1, and provided further, that, unless otherwise permitted
         by each Rating Agency, upon the failure of any Eligible
         Institution to maintain any applicable rating set forth in this
         definition or the definition of Eligible Institution, the related
         investments at such institution shall be reinvested in Eligible
         Investments at a successor Eligible Institution within 10 days,
         and provided, further, that, any Eligible Investment must not:

                  (a)      be sold, liquidated or otherwise disposed of at
                           a loss, prior to the maturity thereof, or

                  (b)      mature later than (i) the date on which the
                           proceeds of such Eligible Investment will be
                           required to be on deposit in the Collection
                           Account in order for the Trustee to make all
                           required and scheduled payments and deposits
                           into Subaccounts under the Indenture, if such
                           Eligible Investment is held by an Affiliate of
                           the Trustee, or (ii) the Business Day prior to
                           the date on which the proceeds of such Eligible
                           Investment will be required to be on deposit in
<PAGE>
                           the Collection Account in order for the Trustee
                           to make all required and scheduled payments and
                           deposits into Subaccounts under the Indenture,
                           if such Eligible Investment is not held by an
                           Affiliate of the Trustee; provided, however that
                           with respect to the period prior to the first
                           Payment Date any Eligible Investment must not
                           have a maturity of greater than six months.

         Eligible Securities Account means either:

                  (a)      a segregated trust account with an Eligible
                           Institution or

                  (b)      a segregated trust account with the corporate
                           trust department of a depositary institution
                           organized under the laws of the United States of
                           America or any State (or any domestic branch of
                           a foreign bank), having corporate trust powers
                           and acting as trustee for funds deposited in
                           such account, so long as any of the securities
                           of such depositary institution shall have a
                           credit rating from each Rating Agency in one of
                           its generic rating catego ries which signifies
                           investment grade.

         Event of Default has the meaning specified in Section 5.01 of the
         Indenture.

         Exchange Act means the Securities Exchange Act of 1934, as
         amended.

         Expected Amortization Schedule means, with respect to each Series
         or, if applicable, each Class of Securitization Bonds, the
         expected amortization schedule for principal thereof, as specified
         in the Series Supplement therefor.

         Expected Final Payment Date means, with respect to each Series or,
         if applicable, each Class of Securitization Bonds, the date when
         all interest and principal is scheduled to be paid with respect to
         that Series or Class in accordance with the Expected Amortization
         Schedule, as specified in the Series Supplement therefor.

         Filing Office means the Office of the of the Secretary of State of
         the State of Michigan or the Office of the Secretary of State of
         the State of Delaware, as applicable.

         Final Maturity Date means, for each Series or, if applicable, each
         Class of Securitization Bonds, the date by which all principal of
         and interest on such Series or Class of Securitization Bonds is
         required to be paid, as specified in the Series Supplement
         therefor.

         Financing Issuance means an issuance of a new Series of
         Securitization Bonds under the Indenture to provide funds to
         finance the purchase by the Issuer of Securitization Property.

         Financing Order means the Opinion and Order issued on October 24,
         2000 and the Order Granting Rehearing issued on January 12, 2001
         by the MPSC (MPSC Docket Number U-12505) with respect to
         Consumers.

         Fitch means Fitch, Inc., or its successor.

         Formation Documents means, collectively, the Issuer LLC Agreement,
         the Issuer Certificate of Formation and any other document
         pursuant to which the Issuer is formed or governed, as each may be
         amended or supplemented from time to time.

<PAGE>
         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 agree ment 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 Agree ment.

         Indemnity Amount means the amount of any indemnification
         obligation payable under the Basic Documents.

         Indenture means the Indenture dated as of November 8, 2001,
         between the Issuer and the Trustee, as the same may be amended and
         supplemented from time to time by one or more Supplemental
         Indentures, and shall include each Series Supplement and the forms
         and terms of the Securitization Bonds established thereunder.

         Independent means, when used with respect to any specified Person,
         that the Person

                  (a)      is in fact independent of the Issuer, any other
                           obligor upon the Securitiza tion 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,
                           pro moter, underwriter, trustee, partner,
                           director or person performing similar functions.

         Independent Certificate means a certificate or opinion to be
         delivered to the Trustee under the circumstances described in, and
         otherwise complying with, the applicable requirements of Section
         11.01 of the Indenture, made by an Independent appraiser or other
         expert appointed by an Issuer Order and approved by the Trustee in
         the exercise of reasonable care, and such opinion or certificate
         shall state that the signer has read the definition of
         "Independent" in this Appendix A and that the signer is
         Independent within the meaning thereof.
<PAGE>

         Independent Manager has the meaning set forth in the Issuer LLC
         Agreement.

         Initial Purchase Price has the meaning set forth in Section
         2.01(a) of the Sale Agreement.

         Initial Transfer Date means the Series Issuance Date for the first
         Series of Securitization Bonds.

         Initial Transferred Securitization Property means the
         Securitization Property sold, assigned and/or transferred by the
         Seller to the Issuer as of the Initial Transfer Date pursuant to
         the Sale Agreement and the Bill of Sale delivered on or prior to
         the Initial Transfer Date as identified in such Bill of Sale.

         Insolvency Event means, with respect to a specified Person,

                  (a)      the filing of a decree or order for relief by a
                           court having jurisdiction in the premises in
                           respect of such Person or any substantial part
                           of its property in an involuntary case under any
                           applicable Federal or State bankruptcy,
                           insolvency or other similar law now or hereafter
                           in effect, or appointing a receiver, liquidator,
                           assignee, custodian, trustee, sequestrator or
                           similar official for such Person or for any
                           substantial part of its property, or ordering
                           the winding-up or liquidation of such Person's
                           affairs, and such decree or order shall remain
                           unstayed and in effect for a period of 90
                           consecutive days or

                  (b)      the commencement by such Person of a voluntary
                           case under any applica ble Federal or State
                           bankruptcy, insolvency or other similar law now
                           or hereafter in effect, or the consent by such
                           Person to the entry of an order for relief in an
                           involuntary case under any such law, or the
                           consent by such Person to the appointment of or
                           taking possession by a receiver, liquidator,
                           assignee, custodian, trustee, sequestrator or
                           similar official for such Person or for any
                           substantial part of its property, or the making
                           by such Person of any general assignment for the
                           benefit of creditors, or the failure by such
                           Person generally to pay its debts as such debts
                           become due, or the taking of action by such
                           Person in furtherance of any of the foregoing.

         Intercreditor Agreement means: (i) the Intercreditor Agreement
         dated as of November 8, 2001 (the "Initial Intercreditor
         Agreement"), among Consumers, the Trustee, the Issuer, Canadian
         Imperial Bank of Commerce and Asset Securitization Cooperative
         Corporation, as amended and supplemented from time to time; or
         (ii) any subsequent intercreditor agreement entered into by the
         Trustee pursuant to Section 18(b) of the Initial Intercreditor
         Agreement.

       Interest means, for any Payment Date for any Series or Class of
         Securitization Bonds, the sum, without duplication, of:

                  (a)      an amount equal to the amount of interest
                           accrued at the applicable Interest Rate from the
                           prior Payment Date with respect to that Series
                           or Class;

                  (b)      any unpaid interest, plus any interest accrued
                           on this unpaid inter est at the applicable
                           Interest Rate, to the extent permitted by appli
                           cable 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 inter est 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 Forma tion of the Issuer which was filed with the
         Delaware Secretary of State's Office on November 6, 2001, as the
         same may be amended or supplemented from time to time.

         Issuer LLC Agreement means the Amended and Restated Limited
         Liability Company Agreement between the Issuer and Consumers, as
         sole Member, dated as of November 8, 2001, as the same may be
         amended or supplemented from time to time.

         Issuer Officer's Certificate means a certificate signed by any
         Authorized Officer of the Issuer, under the circumstances
         described in, and otherwise complying with, the applicable
         requirements of Section 11.01 of the Indenture, and delivered to
         the Trustee. Unless otherwise specified, any reference in the
         Indenture to an Officer's Certificate shall be to an Officer's
         Certificate of any Authorized Officer of the Issuer.
<PAGE>

         Issuer Opinion of Counsel means one or more written opinions of
         counsel who may, except as otherwise expressly provided in the
         Indenture, be employees of or counsel to the Issuer or the Seller
         and who shall be reasonably satisfactory to the Trustee, and which
         opinion or opinions shall be addressed to the Trustee, and shall
         be in a form reasonably satisfactory to the Trustee.

         Issuer Order or Issuer Request means a written order or request,
         respectively, signed in the name of the Issuer by any one of its
         Authorized Officers and delivered to the Trustee.

         Legal Defeasance Option has the meaning specified in Section
         4.01(b) of the Indenture.

         Lien means a security interest, lien, charge, pledge, equity or
         encumbrance of any kind.

         Losses means collectively, any and all liabilities, obligations,
         losses, damages, payments, costs or expenses of any kind
         whatsoever.

         Manager has the meaning set forth in the Issuer LLC Agreement.

         Member means Consumers, as the sole member of the Issuer, in its
         capacity as such member under the Issuer LLC Agreement.

         Michigan UCC means the Uniform Commercial Code, as in effect in
         the State of Michigan, as amended from time to time.

         Monthly Remittance Date means the 19th day of each calendar month
         (or if such day is not a Business Day, the preceding Business
         Day).

         Monthly Servicing Fee means the fee payable to the Servicer on a
         monthly basis for services rendered, in accordance with Section
         5.07 of the Servicing Agreement.

         Moody's means Moody's Investors Service, Inc., or its successor.

         MPSC means the Michigan Public Service Commission or its
         successor.

         MPSC Regulations means any regulations, orders, guidelines or
         directives promulgated, issued or adopted by the MPSC, as in
         effect from time to time.

         Officers' Certificate means, with respect to a corporation, a
         certificate signed by the chairman of the board, the president,
         the vice chairman of the board, any executive vice president, any
         vice president, the treasurer or the secretary of such company,
         and with respect to a limited liability company, any Manager.

         Operating Expenses means, with respect to the Issuer, all fees,
         costs, expenses and indemnity payments owed by the Issuer,
         including, without limitation, all amounts owed by the Issuer to
         the Trustee, the Monthly Servicing Fee, the fees and expenses
         payable by the Issuer to the Administrator under the
         Administration Agreement, the fees and expenses payable by the
         Issuer to the Independent Managers and Special Members of the
         Issuer, fees of the Rating Agencies, legal fees and expenses of
         the Servicer pursuant to Section 3.10 of the Servicing Agreement,
         legal and accounting fees, costs and expenses of the Issuer and
         legal, accounting or other fees, costs and expenses of the Seller
         (includ ing, 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.
<PAGE>

         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 cancella
                           tion;

                  (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
         Docu ment, Securitization Bonds owned by the Issuer, any other
         obligor upon the Securitiza tion Bonds, Consumers or any Affiliate
         of any of the foregoing Persons shall be disre garded 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.

<PAGE>
         Outstanding Amount means the aggregate principal amount of all
         Outstanding Securitiza tion Bonds or, if the context requires, all
         Outstanding Securitization Bonds of a Series or Class Outstanding
         at the date of determination.

         Overcollateralization means, with respect to any Payment Date, an
         amount that, if deposited to the Overcollateralization Subaccount,
         would cause the balance in such subaccount to equal the Scheduled
         Overcollateralization Level for such Payment Date, without regard
         to investment earnings.

         Overcollateralization Amount means, with respect to any Series of
         Securitization Bonds, the amount specified as such in the Series
         Supplement therefor.

         Overcollateralization Subaccount has the meaning specified in
         Section 8.02(a) of the Indenture.

         Paying Agent means the Trustee or any other Person, including any
         Person appointed pursuant to Section 3.02(b) of the Indenture,
         that meets the eligibility standards for the Trustee specified in
         Section 6.11 of the Indenture and is authorized by the Issuer to
         make the payments of principal of or premium, if any, or interest
         on the Securitization Bonds on behalf of the Issuer.

         Payment Date means, with respect to each Series or Class of
         Securitization Bonds, each date or dates respectively specified as
         Payment Dates for such Series or Class in the Series Supplement
         therefor.

         Person means any individual, corporation, estate, partnership,
         joint venture, association, joint stock company, trust (including
         any beneficiary thereof), business trust, limited liability
         company, unincorporated organization or government or any agency
         or political subdivision thereof.

         Predecessor Securitization Bond means, with respect to any
         particular Securitization Bond, every previous Securitization Bond
         evidencing all or a portion of the same debt as that evidenced by
         such particular Securitization Bond; and, for the purpose of this
         definition, any Securitization Bond authenticated and delivered
         under Section 2.06 of the Indenture in lieu of a mutilated, lost,
         destroyed or stolen Securitization Bond shall be deemed to
         evidence the same debt as the mutilated, lost, destroyed or stolen
         Securitiza tion Bond.

         Principal means, with respect to any Payment Date and each Series
         or Class of Securiti zation 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 redemp tion of Securitization
                           Bonds on such Payment Date; and

                  (e)      any overdue payments of principal.

         Pro Rata has the meaning set forth in Section 8.02(l) of the
         Indenture.

<PAGE>
         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 of such action
         and the notification from each of Fitch and S&P to the Trustee and
         the Issuer that such action will not result in a reduction or
         withdrawal of the then current rating by such Rating Agency of any
         Outstanding Series or Class of Securitization Bonds.

         Record Date has the meaning set forth in each Supplemental
         Indenture.

         Redemption Date means, with respect to each Series or Class of
         Securitization Bonds, the date for the redemption of the
         Securitization Bonds of such Series or Class pursuant to Sections
         10.01 or 10.02 of the Indenture or the Series Supplement for such
         Series or Class, which in each case shall be a Payment Date.

         Redemption Price has the meaning set forth in Section 10.01 of the
         Indenture.

         Refunding Issuance means an issuance of a new Series of
         Securitization Bonds under the Indenture to pay the cost of
         refunding, through redemption or payment on the Expected Final
         Payment Date for a Series or Class of Securitization Bonds, all or
         part of the Securitization Bonds of such Series or Class to the
         extent permitted by the terms thereof.

         Released Parties has the meaning specified in Section 5.02(e) of
         the Servicing Agreement.

         Remittance Date means a Daily Remittance Date or a Monthly
         Remittance Date, as applicable.

         Required Capital Amount means with respect to any Series, the
         amount required to be deposited in the Capital Subaccount on the
         Series Issuance Date of such Series, as specified in the related
         Series Supplement.
<PAGE>

         Reserve Subaccount has the meaning specified in Section 8.02(a) of
         the Indenture.

         Responsible Officer means, with respect to the Trustee, any
         officer assigned to the Corporate Trust Division (or any successor
         thereto), including any vice president, assistant vice president,
         trust officer, secretary, assistant secretary, or any other
         officer of the Trustee customarily performing functions similar to
         those performed by any of the above designated officers, in each
         case having direct responsibility for the administration of the
         Indenture.

         Retiring Trustee has the meaning specified in Section 6.08(b) of
         the Indenture.

         Sale Agreement means the Sale Agreement dated November 8, 2001
         between the Seller and the Issuer, as the same may be amended or
         supplemented from time to time.

         Scheduled Overcollateralization Level means, with respect to each
         Series and any Payment Date, the amount with respect to such
         Series set forth as such in Schedule B of the Series Supplement.

         Secured Obligations has the meaning set forth in the Granting
         Clause of the Indenture.

         Securities Account Control Agreement means the securities account
         control agreement dated as of November 8, 2001, by and between
         Consumers Funding LLC, as debtor, the Trustee as the secured party
         and The Bank of New York, in its capacity as securities
         intermediary thereunder.

         Securitization Bond means any of the Securitization Bonds (as
         defined in the Customer Choice Act) issued by the Issuer pursuant
         to the Indenture.

         Securitization Bond Balance means, as of any date, the aggregate
         Outstanding Amount of all Series of Securitization Bonds on such
         date.

         Securitization Bond Register has the meaning specified in Section
         2.05(a) of the Indenture.

         Securitization Bond Registrar has the meaning specified in Section
         2.05(a) of the Indenture.

         Securitization Charge means the nonbypassable amounts to be
         charged for the use or availability of electric services (but does
         not include tax charges authorized by the Financing Order),
         approved by the MPSC under the Financing Order, to fully recover
         qualified costs, to be collected by Consumers, its successors,
         assignees or other collection agents, as provided for in the
         Financing Order.
<PAGE>

         Securitization Charge Adjustment means each adjustment to the
         Securitization Charge related to the Transferred Securitization
         Property made in accordance with Section 4.01 of the Servicing
         Agreement, the Issuer Annex and the Financing Order.

         Securitization Charge Rate means the amount of the surcharge
         applied to all kilo watt-hours (KWh) billed to determine the
         amount of the Securitization Charges.

         Securitization Charge Collections means amounts received by the
         Servicer in respect of the Securitization Charge as determined by
         the Servicer in accordance with the allocation methodology set
         forth in Annex 2 to the Servicing Agreement.

         Securitization Property has the meaning assigned to that term in
         the Customer Choice Act and as approved with respect to Consumers
         in the Financing Order.

         Securitization Property Documentation means all documents relating
         to the Transferred Securitization Property, including copies of
         the Financing Order and all documents filed with the MPSC in
         connection with any Securitization Charge Adjustment.

         Securitization Ratio means for an entire Billing Month the total
         Securitization Charges billed by the Servicer for each rate class
         divided by the total charges billed by Consumers and the Servicer
         for each rate class to customers for such Billing Month. Customers
         for this purpose refers to Consumers' electric and combination
         electric and gas customers (and not gas only customers).

         Seller means Consumers, in its capacity as seller of the
         Securitization Property to the Issuer pursuant to the Sale
         Agreement.

         Series means any series of Securitization Bonds issued by the
         Issuer and authenticated by the Trustee pursuant to the Indenture,
         as specified in the Series Supplement therefor.

         Series Capital Subaccount has the meaning specified in Section
         8.02(a) of the Indenture.

         Series Issuance Date means, with respect to any Series, the date
         on which the Securitiza tion 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.

<PAGE>
         Series Subaccount has the meaning specified in Section 8.02(a) of
         the Indenture.

         Series Supplement means an indenture supplemental to the Indenture
         that authorizes a particular Series of Securitization Bonds, as
         the same may be amended or supplemented from time to time.

         Servicer means Consumers, as the servicer of the Securitization
         Property, and each successor to Consumers (in the same capacity)
         pursuant to Section 5.03, 5.04 or 6.04 of the Servicing Agreement.

         Servicer Default means an event specified in Section 6.01 of the
         Servicing Agreement.

         Servicing Agreement means the Servicing Agreement dated as of
         November 8, 2001 between the Issuer and the Servicer, as the same
         may be amended and supplemented from time to time.

         Special Member has the meaning set forth in the Issuer LLC
         Agreement.

         Standard & Poor's, or S&P, means Standard & Poor's Ratings Group,
         a division of The McGraw-Hill Companies, or its successor.

         State means any one of the 50 states of the United States of
         America or the District of Columbia.

         Subaccount means any of the subaccounts of the Collection Account
         specified in Section 8.02 of the Indenture.

         Subsequent Sale means the sale of additional Securitization
         Property by the Seller to the Issuer after the Initial Transfer
         Date, subject to the satisfaction of the conditions specified in
         the Sale Agreement and the Indenture.

         Subsequent Transfer Date means the date that a sale of Subsequent
         Transferred Securiti zation 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.
<PAGE>

         Termination Notice has the meaning specified in Section 6.01(d) of
         the Servicing Agreement.

         Transfer Date means the Initial Transfer Date or any Subsequent
         Transfer Date, as applicable.

         Transferred Securitization Property means Securitization Property
         which has been sold, assigned and/or transferred to the Issuer
         pursuant to the Sale Agreement and the Bill of Sale.

         Trust Indenture Act or TIA means the Trust Indenture Act of 1939,
         as in force on the date hereof, unless otherwise specifically
         provided.

         Trustee means The Bank of New York, a New York banking
         corporation, or its succes sor, as trustee under the Indenture, or
         any successor Trustee under the Indenture.

         UCC means the Uniform Commercial Code, as in effect in the
         relevant jurisdiction, as amended from time to time.

         Underwriting Agreement means the Underwriting Agreement dated as
         of October 31, 2001 among the Seller, the Issuer and Morgan
         Stanley & Co. Incorporated, on behalf of itself and as the
         representative of the several underwriters named therein.

         U.S. Government Obligations means direct obligations (or
         certificates representing an ownership interest in such
         obligations) of the United States of America (including any agency
         or instrumentality thereof) for the payment of which the full
         faith and credit of the United States of America is pledged and
         which are not callable at the issuer's option.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.Q
<SEQUENCE>7
<FILENAME>k65350ex4-q.txt
<DESCRIPTION>SERIES SUPPLEMENT DATED AS OF NOVEMBER 8, 2001
<TEXT>
<PAGE>

                               EXHIBIT 4(q)

                             SERIES SUPPLEMENT





                           CONSUMERS FUNDING LLC,

                                   Issuer


                                    and


                           THE BANK OF NEW YORK,

                                  Trustee


                       ------------------------------

                          2001-1 SERIES SUPPLEMENT

                        Dated as of November 8, 2001

                       ------------------------------





<PAGE>



         2001-1 SERIES SUPPLEMENT dated as of November 8, 2001 (this
"Supplement"), by and between CONSUMERS FUNDING LLC, a Delaware limited
liability company (the "Issuer"), and THE BANK OF NEW YORK, a New York
banking corporation (the "Trustee"), as Trustee under the Indenture dated
as of November 8, 2001 between the Issuer and the Trustee (the
"Indenture").

                           PRELIMINARY STATEMENT

         Section 9.01 of the Indenture provides, among other things, that
the Issuer and the Trustee may at any time and from time to time enter into
one or more indentures supplemental to the Indenture for the purposes of
authorizing the issuance by the Issuer of a Series of Securitization Bonds
and specifying the terms thereof. The Issuer has duly authorized the
execution and delivery of this Supplement and the creation of a Series of
Securitization Bonds with an initial aggregate principal amount of
$468,592,000 to be known as the Issuer's Securitization Bonds, Series
2001-1 (the "Series 2001-1 Securitization Bonds"). All acts and all things
necessary to make the Series 2001-1 Securitization Bonds, when duly
executed by the Issuer and authenticated by the Trustee as provided in the
Indenture and this Supplement and issued by the Issuer, the valid, binding
and legal obligations of the Issuer and to make this Supplement a valid and
enforceable supplement to the Indenture have been done, performed and
fulfilled and the execution and delivery hereof have been in all respects
duly and lawfully authorized. The Issuer and the Trustee are executing and
delivering this Supplement in order to provide for the Series 2001-1
Securitization Bonds.

         In order to secure the payment of principal of and interest on the
Series 2001-1 Securitization Bonds issued and to be issued under the
Indenture and/or any Series Supplement, the Issuer hereby confirms the
Grant to the Trustee for the benefit of the Holders of the Series 2001-1
Securitization Bonds from time to time issued and Outstanding, of all of
the Issuer's right, title and interest in, to and under the Collateral,
including, without limitation, the Securitization Property transferred by
the Seller to the Issuer as of the Initial Transfer Date pursuant to the
Sale Agreement and all proceeds thereof.

         The Trustee, on behalf of the Holders of the Series 2001-1
Securitization Bonds, acknowledges the confirmation of such Grant, accepts
the trusts hereunder in accordance with the provisions hereof and agrees to
perform its duties required in the Indenture and this Supplement.

         SECTION 1. Definitions.

         All terms used in this Supplement that are defined in the
Indenture, either directly or by reference therein, have the meanings
assigned to them therein, except to the extent such terms are defined or
modified in this Supplement or the context clearly requires otherwise.

         SECTION 2. Other Definitional Provisions.

<PAGE>
                  Authorized Denominations shall mean $1,000 and integral
multiples of $1.00 above that amount, provided, however, that one
Securitization Bond of each Class may have a denomination of less than
$1,000.

                  Calculation Period means, with respect to a Payment Date,
the period from and including the preceding Payment Date to but excluding
such Payment Date, or in the case of the first Calculation Period, from and
including the Series Issuance Date to but excluding the initial Payment
Date.

                  Expected Amortization Schedule means Schedule A to this
Supplement.

                  Expected Final Payment Date means, with respect to any
Class of the Series 2001-1 Securitization Bonds, the expected final payment
date therefor, as specified in Section 4 of this Supplement.

                  Final Maturity Date means, with respect to any Class of
the Series 2001-1 Securitization Bonds, the final maturity date thereof, as
specified in Section 4 of this Supplement.

                  Interest Rate has the meaning set forth in Section 4 of
this Supplement.

                  Overcollateralization Amount has the meaning set forth in
Section 6(d) of this Supplement.

                  Payment Date has the meaning set forth in Section 5(a) of
this Supplement.

                  Record Date shall mean, with respect to any Payment Date,
the Business Day prior to such Payment Date or, with respect to any
Definitive Securitization Bonds, the last Business Day of the month
preceding such Payment Date.

                  Required Capital Amount has the meaning set forth in
Section 5(e) of this Supplement.

                  Series Issuance Date has the meaning set forth in Section
3(b) of this Supplement.

         SECTION 3. Designation; Series Issuance Dates.

                  (a) Designation. The Series 2001-1 Securitization Bonds
shall be designated generally as the Issuer's Securitization Bonds, Series
2001-1, and further denominated as Class A-1, Class A-2, Class A-3, Class
A-4, Class A-5 and Class A-6.

                  (b) Series Issuance Date. The Series 2001-1
Securitization Bonds that are authenticated and delivered by the Trustee to
or upon the order of the Issuer on November 8, 2001 (the "Series Issuance
Date") shall have as their date of authentication November 8, 2001.

<PAGE>
         SECTION 4. Initial Principal Amount; Interest Rate; Expected Final
Payment Date; Final Maturity Dates.

         The Securitization Bonds of each Class of the Series 2001-1
Securitization Bonds shall have the initial principal amounts, bear
interest at the Interest Rates and have Expected Final Payment Dates and
Final Maturity Dates as set forth below:


<TABLE>
<CAPTION>
                               Initial
                              Principal                                   Expected Final                  Final
       Class                   Amount                 Interest Rate        Payment Date               Maturity
Date
       -----                   ------                 -------------        ------------
- -------------

<S>                          <C>                          <C>            <C>                        <C>
A-1                          $26,000,000                  2.59000%       April 20, 2003             April 20, 2005
A-2                          $84,000,000                  3.80000%       April 20, 2006             April 20, 2008
A-3                          $31,000,000                  4.55000%       April 20, 2007             April 20, 2009
A-4                          $95,000,000                  4.98000%       April 20, 2010             April 20, 2012
A-5                         $117,000,000                  5.43000%       April 20, 2013             April 20, 2015
A-6                         $115,592,000                  5.76000%       October 20, 2015           October 20,
2016
</TABLE>

         The interest payable on the Series 2001-1 Securitization Bonds for
any Payment Date shall be computed on the basis of a 360-day year of twelve
30-day months or, for the initial Payment Date, the number of days from and
including the Series Issuance Date to but excluding the initial Payment
Date.

         SECTION 5. Payment Dates; Expected Amortization Schedule for
Principal; Interest; Overcollateralization Amount; Required Capital Amount.

                  (a) Payment Dates. The Payment Dates for each Class of
the Series 2001-1 Securitization Bonds are January 20, April 20, July 20,
October 20 of each year or, if any such date is not a Business Day, the
next succeeding Business Day, commencing on July 20, 2002 and continuing
until the earlier of repayment of such Class in full and the applicable
Final Maturity Date.

                  (b) Expected Amortization Schedule for Principal. Except
in the case of an optional redemption pursuant to Section 10.01 of the
Indenture, unless an Event of Default has occurred and is continuing and
the unpaid principal amount of all Series of Securitization Bonds has been
declared to be due and payable together with accrued and unpaid interest
thereon, on each Payment Date the Trustee shall distribute to the Series
2001-1 Securitization Bondholders of record as of the related Record Date
amounts payable in respect of the Series 2001-1 Securitization Bonds
pursuant to Section 8.02(g) of the Indenture as principal, in accordance
with the Expected Amortization Schedule. Notwithstanding the foregoing, if
one or more Classes did not receive principal on any prior Payment Date in
accordance with the Expected Amortization Schedule, such shortfalls of
principal shall be paid prior to the payment of principal scheduled to be
paid on the current Payment Date and shall be paid in the order in which
such amounts were scheduled to be paid previously pursuant to the Expected
Amortization Schedule; provided, however, that in no event shall a
principal payment pursuant to this Section 6(b) on any Class on a Payment
Date be greater than the amount that reduces the Outstanding Amount of such
Class of Series 2001-1 Securitization Bonds to the amount specified in the
Expected Amortization Schedule for such Class and Payment Date.
<PAGE>

                  (c) Interest. On each Payment Date after the initial
Payment Date, interest will be payable on each Class of the Series 2001-1
Securitization Bonds in an amount equal to the number of days (determined
on the basis of a 360-day year of twelve 30-day months and assuming that
the 20th day is also a Business Day) from and including the preceding
Payment Date to, but excluding, the current Payment Date, divided by 360,
times the product of.

                           (a)      the applicable Interest Rate for the
         related Class of Securitization Bonds times

                           (b) the Outstanding Amount of the related Class
         of Securitization Bonds as of the close of business on the
         preceding Payment Date after giving effect to all payments of
         principal made to the Holders of the related Class of
         Securitization Bonds on such preceding Payment Date.

                  With respect to the initial Payment Date, interest will
be payable on each Class of the Series 2001-1 Securitization Bonds in an
amount equal to the number of days (determined on the basis of a 360-day
year of twelve 30-day months) from and including the Series Issuance Date
to, but excluding, the initial Payment Date divided by 360, times the
product of:

                           (a)      the applicable Interest Rate for such
         Class times

                           (b)      the original principal amount of such Class
         of Securitization Bonds as of the Series Issuance Date.

                  (d) Overcollateralization Amount. The Overcollateralization
Amount for the Series 2001-1 Securitization Bonds shall be as set forth in
Schedule B hereto.

                  (e) Required Capital Amount. The Required Capital Amount
for the Series 2001-1 Securitization Bonds shall be $2,342,960.

                  (f) No Premium. No premium will be payable in connection
with the early redemption of the Series 2001-1 Securitization Bonds

         SECTION 6. Authorized Denominations. The Series 2001-1
Securitization Bonds shall be issuable in the Authorized Denominations.

         SECTION 7. Redemption.

                  (a) Mandatory Redemption. The Series 2001-1
Securitization Bonds shall not be subject to mandatory redemption.

<PAGE>
                  (b) Optional Redemption. The Issuer may redeem the
Securitization Bonds of Series 2001-1, at its option, on any Payment Date
in accordance with Section 10.01 of the Indenture if (1) after giving
effect to payments that would otherwise be made on such Payment Date, the
Outstanding Amount of such Series has been reduced to less than five
percent of the initial principal balance of such Series and (2) no Interest
Rate Swap Agreement is in effect.

         SECTION 8. Credit Enhancement. No credit enhancement (other than
the Overcollateralization Amount, the Required Capital Amount and any
adjustments to the Securitization Charge approved by the MPSC as
contemplated in the Servicing Agreement) is provided for the Series 2001-1
Securitization Bonds.

         SECTION 9. Delivery and Payment for the Series 2001-1
Securitization Bonds; Form of the Series 2001-1 Securitization Bonds. The
Trustee shall deliver the Series 2001-1 Securitization Bonds to the Issuer
when authenticated in accordance with Section 2.02 of the Indenture. The
Series 2001-1 Securitization Bonds of each Class shall be in the form of
Exhibits A through D hereto.

         SECTION 10. Administration Fee. The Administrator shall be paid by
the Issuer a fee of $20,000 on each Payment Date with respect to the Series
2001-1 Securitization Bonds.

         SECTION 11. Confirmation of Indenture. As supplemented by this
Supplement, the Indenture is in all respects ratified and confirmed and the
Indenture, as so supplemented by this Supplement, shall be read, taken, and
construed as one and the same instrument.

         SECTION 12. Counterparts. This Supplement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one
and the same instrument.

         SECTION 13. Governing Law. This Supplement 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.

                  IN WITNESS WHEREOF, the Issuer and the Trustee have
caused this Supplement to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date first above
written.


                               CONSUMERS FUNDING LLC,
                                  as Issuer



                              By: /s/ Laura L. Mountcastle
                                  ---------------------------------
                                    Name:  Laura L. Mountcastle
                                    Title: President, Chief Executive Officer,
                                           Chief Financial Officer and Treasurer



                               THE BANK OF NEW YORK, as Trustee



                              By: /s/ Cassandra D. Shedd
                                  ----------------------
                                    Name:  Cassandra D. Shedd
                                    Title: Assistant Vice President


<PAGE>

<TABLE>
<CAPTION>
                                                    SCHEDULE A
                          Expected Amortization Schedule - Outstanding Principal Balance
                                    (all amounts are in United States Dollars)


Payment Date      Class A-1       Class A-2       Class A-3      Class A-4      Class A-5        Class A-6
- ---------------------------------------------------------------- ------------------------------------------------

- -----------------------------------------------------------------------------------------------------------------
      <S>           <C>             <C>           <C>             <C>             <C>                 <C>
       7/20/02      17,655,681      84,000,000    31,000,000      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
      10/20/02      10,350,370      84,000,000    31,000,000      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       1/20/03       3,691,230      84,000,000    31,000,000      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       4/20/03               0      80,995,212    31,000,000      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       7/20/03               0      74,960,820    31,000,000      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
      10/20/03               0      67,445,198    31,000,000      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       1/20/04               0      60,523,312    31,000,000      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       4/20/04               0      53,595,934    31,000,000      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       7/20/04               0      47,370,596    31,000,000      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
      10/20/04               0      39,659,114    31,000,000      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       1/20/05               0      32,539,944    31,000,000      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       4/20/05               0      25,400,876    31,000,000      95,000,000      117,000,000         115,592,000
- ----------------------------------------------------------------------------------------------------------------
       7/20/05               0      18,957,771    31,000,000      95,000,000      117,000,000         115,592,000
- ----------------------------------------------------------------------------------------------------------------
      10/20/05               0      11,013,254    31,000,000      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       1/20/06               0       3,669,663    31,000,000      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       4/20/06               0               0    27,311,403      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       7/20/06               0               0    20,631,820      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
      10/20/06               0               0    12,422,539      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       1/20/07               0               0     4,811,562      95,000,000      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       4/20/07               0               0             0      92,178,190      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       7/20/07               0               0             0      85,196,052      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
      10/20/07               0               0             0      76,659,749      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       1/20/08               0               0             0      68,722,123      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       4/20/08               0               0             0      60,760,937      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       7/20/08               0               0             0      53,430,899      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
      10/20/08               0               0             0      44,529,552      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       1/20/09               0               0             0      36,234,922      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       4/20/09               0               0             0      27,921,859      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       7/20/09               0               0             0      20,224,989      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
      10/20/09               0               0             0      10,939,860      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       1/20/10               0               0             0       2,268,849      117,000,000         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       4/20/10               0               0             0               0      110,583,885         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       7/20/10               0               0             0               0      102,493,016         115,592,000
- -----------------------------------------------------------------------------------------------------------------
      10/20/10               0               0             0               0       92,787,923         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       1/20/11               0               0             0               0       83,692,571         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       4/20/11               0               0             0               0       74,576,511         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       7/20/11               0               0             0               0       66,036,174         115,592,000
- -----------------------------------------------------------------------------------------------------------------
      10/20/11               0               0             0               0       55,863,953         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       1/20/12               0               0             0               0       46,306,494         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       4/20/12               0               0             0               0       36,730,431         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       7/20/12               0               0             0               0       27,714,166         115,592,000
- -----------------------------------------------------------------------------------------------------------------
      10/20/12               0               0             0               0       17,048,406         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       1/20/13               0               0             0               0        7,001,680         115,592,000
- -----------------------------------------------------------------------------------------------------------------
       4/20/13               0               0             0               0                0         112,529,730
- -----------------------------------------------------------------------------------------------------------------
       7/20/13               0               0             0               0                0         103,007,017
- -----------------------------------------------------------------------------------------------------------------
      10/20/13               0               0             0               0                0          91,809,325
- -----------------------------------------------------------------------------------------------------------------
       1/20/14               0               0             0               0                0          81,224,794
- -----------------------------------------------------------------------------------------------------------------
       4/20/14               0               0             0               0                0          70,614,670
- -----------------------------------------------------------------------------------------------------------------
       7/20/14               0               0             0               0                0          60,522,964
- -----------------------------------------------------------------------------------------------------------------
      10/20/14               0               0             0               0                0          48,737,706
- -----------------------------------------------------------------------------------------------------------------
       1/20/15               0               0             0               0                0          37,425,774
- -----------------------------------------------------------------------------------------------------------------
       4/20/15               0               0             0               0                0          25,254,761
- -----------------------------------------------------------------------------------------------------------------
       7/20/15               0               0             0               0                0          13,561,209
- -----------------------------------------------------------------------------------------------------------------
      10/20/15               0               0             0               0                0                   0
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                    SCHEDULE B


                                   Required Overcollateralization Level Schedule


            Payment Date              Scheduled Overcollateralization Level
- --------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------
            <S>                                                                                  <C>
            Closing                                                                                   $0
- --------------------------------------------------------------------------------------------------------
               7/20/02                                                                           125,516
- --------------------------------------------------------------------------------------------------------
              10/20/02                                                                           167,354
- --------------------------------------------------------------------------------------------------------
               1/20/03                                                                           209,193
- --------------------------------------------------------------------------------------------------------
               4/20/03                                                                           251,031
- --------------------------------------------------------------------------------------------------------
               7/20/03                                                                           292,870
- --------------------------------------------------------------------------------------------------------
              10/20/03                                                                           334,709
- --------------------------------------------------------------------------------------------------------
               1/20/04                                                                           376,547
- --------------------------------------------------------------------------------------------------------
               4/20/04                                                                           418,386
- --------------------------------------------------------------------------------------------------------
               7/20/04                                                                           460,224
- --------------------------------------------------------------------------------------------------------
              10/20/04                                                                           502,063
- --------------------------------------------------------------------------------------------------------
               1/20/05                                                                           543,901
- --------------------------------------------------------------------------------------------------------
               4/20/05                                                                           585,740
- --------------------------------------------------------------------------------------------------------
               7/20/05                                                                           627,579
- --------------------------------------------------------------------------------------------------------
              10/20/05                                                                           669,417
- --------------------------------------------------------------------------------------------------------
               1/20/06                                                                           711,256
- --------------------------------------------------------------------------------------------------------
               4/20/06                                                                           753,094
- --------------------------------------------------------------------------------------------------------
               7/20/06                                                                           794,933
- --------------------------------------------------------------------------------------------------------
              10/20/06                                                                           836,771
- --------------------------------------------------------------------------------------------------------
               1/20/07                                                                           878,610
- --------------------------------------------------------------------------------------------------------
               4/20/07                                                                           920,449
- --------------------------------------------------------------------------------------------------------
               7/20/07                                                                           962,287
- --------------------------------------------------------------------------------------------------------
              10/20/07                                                                         1,004,126
- --------------------------------------------------------------------------------------------------------
               1/20/08                                                                         1,045,964
- --------------------------------------------------------------------------------------------------------
               4/20/08                                                                         1,087,803
- --------------------------------------------------------------------------------------------------------
               7/20/08                                                                         1,129,641
- --------------------------------------------------------------------------------------------------------
              10/20/08                                                                         1,171,480
- --------------------------------------------------------------------------------------------------------
               1/20/09                                                                         1,213,319
- --------------------------------------------------------------------------------------------------------
               4/20/09                                                                         1,255,157
- --------------------------------------------------------------------------------------------------------
               7/20/09                                                                         1,296,996
- --------------------------------------------------------------------------------------------------------
              10/20/09                                                                         1,338,834
- --------------------------------------------------------------------------------------------------------
               1/20/10                                                                         1,380,673
- --------------------------------------------------------------------------------------------------------
               4/20/10                                                                         1,422,511
- --------------------------------------------------------------------------------------------------------
               7/20/10                                                                         1,464,350
- --------------------------------------------------------------------------------------------------------
              10/20/10                                                                         1,506,189
- --------------------------------------------------------------------------------------------------------
               1/20/11                                                                         1,548,027
- --------------------------------------------------------------------------------------------------------
               4/20/11                                                                         1,589,866
- --------------------------------------------------------------------------------------------------------
               7/20/11                                                                         1,631,704
- --------------------------------------------------------------------------------------------------------
              10/20/11                                                                         1,673,543
- --------------------------------------------------------------------------------------------------------
               1/20/12                                                                         1,715,381
- --------------------------------------------------------------------------------------------------------
               4/20/12                                                                         1,757,220
- --------------------------------------------------------------------------------------------------------
               7/20/12                                                                         1,799,059
- --------------------------------------------------------------------------------------------------------
              10/20/12                                                                         1,840,897
- --------------------------------------------------------------------------------------------------------
               1/20/13                                                                         1,882,736
- --------------------------------------------------------------------------------------------------------
               4/20/13                                                                         1,924,574
- --------------------------------------------------------------------------------------------------------
               7/20/13                                                                         1,966,413
- --------------------------------------------------------------------------------------------------------
              10/20/13                                                                         2,008,251
- --------------------------------------------------------------------------------------------------------
               1/20/14                                                                         2,050,090
- --------------------------------------------------------------------------------------------------------
               4/20/14                                                                         2,091,929
- --------------------------------------------------------------------------------------------------------
               7/20/14                                                                         2,133,767
- --------------------------------------------------------------------------------------------------------
              10/20/14                                                                         2,175,606
- --------------------------------------------------------------------------------------------------------
               1/20/15                                                                         2,217,444
- --------------------------------------------------------------------------------------------------------
               4/20/15                                                                         2,259,283
- --------------------------------------------------------------------------------------------------------
               7/20/15                                                                         2,301,121
- --------------------------------------------------------------------------------------------------------
              10/20/15                                                                         2,342,960
- --------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                       Exhibit A to Series Supplement




                                Form of Bond

REGISTERED                                             $

No. R-                                                CUSIP NO.
      ----------                                                ----------------



                    SEE REVERSE FOR CERTAIN DEFINITIONS





         THE PRINCIPAL OF THIS CLASS A-1 SECURITIZATION BOND WILL BE PAID
IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS CLASS A-1 SECURITIZATION BOND AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ON THE FACE HEREOF. THE HOLDER OF THIS CLASS A-1
SECURITIZATION BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE
WHICH IS ONE (1) YEAR AND ONE (1) DAY AFTER THE PAYMENT IN FULL OF THE
SERIES 2001-1, CLASS A-1 SECURITIZATION BONDS, IT WILL NOT INSTITUTE
AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY
BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION
PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES
OR ANY STATE OF THE UNITED STATES. TRANSFERS OF THIS GLOBAL SECURITIZATION
BOND SHALL BE LIMITED TO TRANSFERS IN THE CLEARING AGENCY OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITIZATION BOND SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE.

<PAGE>


<TABLE>
<CAPTION>
                           CONSUMERS FUNDING LLC


              SECURITIZATION BONDS, SERIES 2001-1, CLASS A-1.


<S>                      <C>                               <C>                      <C>
Interest                 Original Principal                Expected Final
Rate                     Amount                            Payment Date             Maturity Date

%                        $
</TABLE>


         CONSUMERS FUNDING LLC, a limited liability company formed and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to the Registered
Holder hereof, or registered assigns, the Original Principal Amount shown
above in quarterly instalments on the Payment Dates (as defined below) and
in the amounts specified on the reverse hereof or, if less, the amounts
determined pursuant to Section 8.02(g) of the Indenture, in each year,
commencing on the date determined as provided on the reverse hereof and
ending on or before the Final Maturity Date, to pay the entire unpaid
principal hereof on the Final Maturity Date and to pay interest, at the
Interest Rate shown above at a fixed rate, on each January 20, April 20,
July 20, and October 20, and if any such day is not a Business Day, the
next succeeding Business Day, commencing on July 20, 2002 and continuing
until the earlier of the payment of the principal hereof and the Final
Maturity Date (each a "Payment Date"), on the principal amount of this
Class A-1 Securitization Bond outstanding from time to time. Interest will
be computed (i) for the first Payment Date on the basis of the number of
days (determined on the basis of a 360-day year of twelve 30-day months)
from and including the Series Issuance Date, to but excluding the initial
Payment Date, divided by 360, multiplied by [ ]%, multiplied by the
original principal amount of the Class A-1 Securitization Bonds as of the
Series Issuance Date, and (ii) for each succeeding Payment Date, the number
of days (determined on the basis of a 360-day year of twelve 30-day months
and assuming that the 20th day is also a Business Day) from and including
the preceding Payment Date to, but excluding, the current Payment Date,
divided by 360, multiplied by [ ]%, multiplied by the Outstanding Amount of
the Class A-1 Securitization Bonds as of the close of business on the
preceding Payment Date after giving effect to all payments of principal
made to the Holders of the Class A-1 Securitization Bonds on such preceding
Payment Date. Such principal of and interest on this Class A Securitization
Bond shall be paid in the manner specified on the reverse hereof.

         The principal of and interest on this Series 2001-1, Class A-1
Securitization Bond are payable in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts. All payments made by the Issuer with respect to
this Class A-1 Securitization Bond shall be applied first to interest due
and payable on this Class A-1 Securitization Bond as provided above and
then to the unpaid principal of this Class A-1 Securitization Bond, all in
the manner set forth in Section 8.02(g) of the Indenture.
<PAGE>

         Reference is made to the further provisions of this Class A-1
Securitization Bond set forth on the reverse hereof, which shall have the
same effect as though fully set forth on the face of this Class A-1
Securitization Bond.

         Unless the certificate of authentication hereon has been executed
by the Trustee whose name appears below by manual signature, this Class A-1
Securitization Bond shall not be entitled to any benefit under the
Indenture referred to on the reverse hereof, or be valid or obligatory for
any purpose.

         IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by an authorized Manager of the Issuer.

Dated:  November 8, 2001



                                                 CONSUMERS FUNDING LLC


                                                By:_____________________________
                                                      Name:
                                                      Title:   Manager




<PAGE>


                  TRUSTEE'S CERTIFICATE OF AUTHENTICATION



Dated: November 8, 2001



         This is one of the Class A-1 Securitization Bonds of the Series
2001-1 Securitization Bonds, designated above and referred to in the
within-mentioned Indenture.



                                            THE BANK OF NEW YORK, as Trustee


                                            By:_________________________________
                                                  Name:
                                                  Title:



                       REVERSE OF SECURITIZATION BOND


         This Series 2001-1, Class A-1 Securitization Bond is one of a duly
authorized issue of Securitization Bonds of the Issuer, designated as its
Securitization Bonds (herein called the "Securitization Bonds"), issued and
to be issued in one or more Series, which Series are issuable in one or
more Classes. The Series 2001-1 Securitization Bonds consist of six
Classes, including the Class A-1 Securitization Bonds (herein called the
"Class A-1 Securitization Bonds"). The Class A-1 Securitization Bonds have
been issued under an indenture dated as of November 8, 2001, and a series
supplement thereto dated as of November 8, 2001, (such series supplement,
as supplemented or amended, the "Series Supplement" and, collectively with
such indenture, as supplemented or amended, the "Indenture"), each between
the Issuer and The Bank of New York, as Trustee (the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a
statement of the Collateral pledged, the nature and extent of the security,
the respective rights, obligations and immunities thereunder of the Issuer,
the Trustee and the Holders of the Securitization Bonds and the terms and
conditions under which additional Securitization Bonds may be issued. All
terms used in this Class A-1 Securitization Bond that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to
them in the Indenture.

         The Class A-1 Securitization Bonds, the other Classes of Series
2001-1 Securitization Bonds and any other Series of Securitization Bonds
issued by the Issuer are and will be equally and ratably secured by the
Collateral pledged as security therefor as provided in the Indenture.

         The principal of this Class A-1 Securitization Bond shall be
payable on each Payment Date only to the extent that amounts in the
Collection Account are available therefor, and only until the outstanding
principal balance of the Class A-1 Securitization Bonds on such Payment
Date (after giving effect to all payments of principal, if any, made on
such Payment Date) has been reduced to the principal balance specified in
the Expected Amortization Schedule which is attached to the Series
Supplement as Schedule A, unless payable earlier either because

                  (i) an Event of Default has occurred and is continuing
         and the Trustee or the Holders of Securitization Bonds
         representing not less than a majority of the Outstanding Amount of
         the Securitization Bonds of all Series have declared the
         Securitization Bonds to be immediately due and payable in
         accordance with Section 5.02 of the Indenture, or

<PAGE>
                  (ii) the Issuer, at its option, has called for the
         redemption of the Series 2001-1 Securitization Bonds in whole
         pursuant to Section 7(b) of the Series Supplement and Section
         10.01 of the Indenture.

However, actual principal payments may be made in lesser than expected
amounts and at later than expected times as determined pursuant to Section
8.02(g) of the Indenture. The entire unpaid principal amount of this Series
2001-1, Class A-1 Securitization Bond shall be due and payable on the
earlier of the Final Maturity Date hereof and the Redemption Date, if any.
Notwithstanding the foregoing, the entire unpaid principal amount of the
Securitization Bonds shall be due and payable, if not then previously paid,
on the date on which an Event of Default shall have occurred and be
continuing and the Trustee or the Holders of the Securitization Bonds of
all Series representing not less than a majority of the Outstanding Amount
of the Securitization Bonds have declared the Securitization Bonds to be
immediately due and payable in the manner provided in Section 5.02 of the
Indenture. All principal payments on the Class A-1 Securitization Bonds
shall be made pro rata to the Class A-1 Securitization Bondholders entitled
thereto based on the respective principal amounts of the Series 2001-1,
Class A-1 Securitization Bonds held by them.

         Payments of interest on this Class A-1 Securitization Bond due and
payable on each Payment Date, together with the instalment of principal
payable on this Class A-1 Securitization Bond on such Payment Date shall be
made by check mailed first-class, postage prepaid, to the Person whose name
appears as the Registered Holder of this Class A-1 Securitization Bond (or
one or more predecessors of such Securitization Bond) in the Securitization
Bond Register as of the close of business on the Record Date or in such
other manner as may be provided in the Series Supplement, except that with
respect to Class A-1 Securitization Bonds registered on the Record Date in
the name of a Clearing Agency, payments will be made by wire transfer in
immediately available funds to the account designated by such Clearing
Agency and except for the final instalment of principal payable with
respect to this Class A-1 Securitization Bond on a Payment Date which shall
be payable as provided below. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears in the
Securitization Bond Register as of the applicable Record Date without
requiring that this Class A-1 Securitization Bond be submitted for notation
of payment. Any reduction in the principal amount of this Class A-1
Securitization Bond (or any one or more predecessor to such Securitization
Bond) effected by any payments made on any Payment Date shall be binding
upon all future Holders of this Class A-1 Securitization Bond and of any
Class A-1 Securitization Bond issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal
amount of this Class A-1 Securitization Bond on a Payment Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person
who was the Registered Holder hereof as of the second preceding Record Date
to such Payment Date by notice mailed no later than five days prior to such
final Payment Date and shall specify that such final instalment will be
payable to the Registered Holder hereof as of the Record Date immediately
preceding such final Payment Date and only upon presentation and surrender
of this Class A-1 Securitization Bond and shall specify the place where
this Series 2001-1, Class A-1 Securitization Bond may be presented and
surrendered for payment of such instalment.
<PAGE>

         The Issuer shall pay interest on overdue instalments of interest
on this Class A-1 Securitization Bond at the Interest Rate for Class A-1 to
the extent lawful.

         As provided in the Indenture, the Class A-1 Securitization Bonds
may be redeemed, in whole, but not in part, in certain circumstances as
provided in Section 7(b) of the Series Supplement and Section 10.01 of the
Indenture.

         This Class A-1 Securitization Bond is a Securitization Bond as
such term is defined in the Customer Choice Act. Principal and interest due
and payable on this Securitization Bond are payable from and secured
primarily by Securitization Property created and established by the
Financing Order pursuant to the Customer Choice Act. Securitization
Property consists of the irrevocable right to impose and collect certain
non-bypassable charges (defined in the Customer Choice Act as
"Securitization Charges") to be included in electric utility bills of all
electric service retail customers of Consumers Energy Company, a Michigan
electric utility.

         Under the Customer Choice Act, the State of Michigan pledges, for
the benefit and protection of the Holders of the Securitization Bonds,
other persons acting for the benefit of a Holder and Consumers, that it
will not take or permit any action that would impair the value of the
Securitization Property, reduce or alter, except as allowed under section
10k(3) of the Customer Choice Act with respect to periodic adjustments of
the Securitization Charges, or impair the Securitization Charges to be
imposed, collected, and remitted to the Trustee, 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 that the Issuer is authorized to include this pledge
in any documentation relating to the Securitization Bonds.

         As provided in the Indenture and subject to certain limitations
set forth therein, the transfer of this Class A-1 Securitization Bond may
be registered in the Securitization Bond Register upon surrender of this
Class A-1 Securitization Bond for registration of transfer at the office or
agency designated by the Issuer pursuant to the Indenture, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an Eligible
Guarantor Institution, and thereupon one or more new Class A-1
Securitization Bonds of any Authorized Denominations and in the same
aggregate initial principal amount will be issued to the designated
transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Class A-1 Securitization Bond,
but the transferor may be required to pay a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
registration of transfer or exchange.

         Prior to the due presentment for registration of transfer of this
Class A-1 Securitization Bond, the Issuer, the Trustee and any agent of the
Issuer or the Trustee may treat the Person in whose name this Class A-1
Securitization Bond is registered (as of the day of determination) as the
owner hereof for the purpose of receiving payments of principal of and
interest on this Class A-1 Securitization Bond and for all other purposes
whatsoever, whether or not this Class A-1 Securitization Bond may be
overdue, and neither the Issuer, the Trustee nor any such agent shall be
affected by notice to the contrary.

<PAGE>
         The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the
Securitization Bonds under the Indenture at any time by the Issuer with the
consent of the Holders of Securitization Bonds representing a majority of
the Outstanding Amount of all Securitization Bonds at the time Outstanding
of each Series or Class to be affected and upon satisfaction of the Rating
Agency Condition. The Indenture also contains provisions permitting the
Holders of Securitization Bonds representing specified percentages of the
Outstanding Amount of the Securitization Bonds of all Series, on behalf of
the Holders of all the Securitization Bonds, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by
the Holder of this Class A-1 Securitization Bond (or any one of more
predecessors of such Securitization Bonds) shall be conclusive and binding
upon such Holder and upon all future Holders of this Class A-1
Securitization Bond and of any Class A-1 Securitization Bond issued upon
the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Class
A-1 Securitization Bond. The Indenture also permits the Trustee to amend or
waive certain terms and conditions set forth in the Indenture without the
consent of Holders of the Securitization Bonds issued thereunder.

         The term "Issuer" as used in this Series 2001-1, Class A-1
Securitization Bond includes any successor to the Issuer under the
Indenture.

         The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the
Trustee and the Holders of Securitization Bonds under the Indenture.

         The Class A-1 Securitization Bonds are issuable only in registered
form in Authorized Denominations as provided in the Indenture and the
Series Supplement, subject to certain limitations therein set forth.

         This Class A-1 Securitization Bond and the Indenture 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 and thereunder shall be determined in
accordance with such laws.

         No reference herein to the Indenture and no provision of this
Class A-1 Securitization Bond or of the Indenture shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Class A-1 Securitization Bond at the
times and rate and in the currency herein prescribed.


                                 ASSIGNMENT


Social Security or taxpayer I.D. or other identifying number of assignee:





         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___


                       (name and address of assignee)

<PAGE>

the within Class A-1 Securitization Bond and all rights thereunder, and hereby
irrevocably constitutes and appoints


                      (name and address of appointee)


attorney, to transfer said Class A-1 Securitization Bond on the books kept
for registration thereof, with full power of substitution in the premises.


Dated:

                                                                               *
- -----------------          -----------------------------------------------------
                           Signature Guaranteed:





*        NOTE: The signature to this assignment must correspond with the
         name of the registered owner as it appears on the face of the
         within Class A-1 Securitization Bond in every particular, without
         alteration, enlargement or any change whatsoever.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.(A)
<SEQUENCE>8
<FILENAME>k65350ex5-a.txt
<DESCRIPTION>OPINION OF MICHAEL D. VANHEMERT
<TEXT>
<PAGE>
                                                                  EXHIBIT (5)(a)


                                             November 21, 2001


Consumers Energy Company
Consumers Energy Company Financing V
Consumers Energy Company Financing VI
212 West Michigan Avenue
Jackson, Michigan 49201

                     RE: Registration Statement on Form S-3

Ladies and Gentlemen:

         I refer to the Registration Statement on Form S-3 (the "Registration
Statement") being filed by Consumers Energy Company (the "Company") and
Consumers Energy Company Financing V and Consumers Energy Company Financing VI
(each a "Trust" and collectively, the "Trusts") with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the registration of $500,000,000 of (i) trust
preferred securities of the Trusts ("Preferred Securities"); (ii) Subordinated
Debentures of the Company ("Debentures"); (iii) Senior Notes of the Company
("Senior Notes"); and (iv) the guarantee of the Preferred Securities by the
Company ("Preferred Securities Guarantee"). (The foregoing offered securities,
collectively, the "Securities".) The Preferred Securities Guarantee is to be
issued pursuant to the Preferred Securities Guarantee Agreement (the "Preferred
Securities Guarantee Agreement") to be entered into between the Company and the
Bank of New York, as trustee (the "Guarantee Trustee"). The Debentures are to be
issued under an Indenture between the Company and the Bank of New York, as
trustee (the "Indenture Trustee"), and one or more supplemental indentures
thereto (collectively, the "Debenture Indenture"). The Senior Notes are to be
issued under a Senior Note Indenture between the Company and The Chase Manhattan
Bank, as trustee (the "Senior Note Trustee") that may include one or more
supplemental indentures thereto according to the terms of the Senior Note
Indenture. Capitalized terms not otherwise defined herein have the respective
meanings specified in the Registration Statement.

                  In rendering this opinion, I have examined and relied upon a
copy of the Registration Statement. I have also examined, or have arranged for
the examination by an attorney or attorneys under my general supervision of,
originals, or copies of originals certified to my satisfaction, of such
agreements, documents, certificates and other statements of governmental
officials and other instruments, and have examined such questions of law and
have satisfied myself as to such matters of fact as I have considered relevant
and necessary as a basis for this opinion. I have assumed the authenticity of
all documents submitted to me as originals, the genuineness of all signatures,
the legal capacity of all natural persons and the conformity with the original
documents of any copies thereof submitted to me for examination.


<PAGE>

         Based on the foregoing, it is my opinion that:

         1.       The Company is duly incorporated and validly existing under
                  the laws of the State of Michigan.

         2.       The Company has corporate power and authority (i) to execute
                  and deliver the Preferred Securities Guarantee Agreement, the
                  Debenture Indenture, and the Senior Note Indenture, (ii) to
                  authorize and sell the Debentures pursuant to the Debenture
                  Indenture, and (iii) to authorize and sell the Senior Notes
                  pursuant to the Senior Note Indenture.

         3.       The Preferred Securities Guarantee will be a legally issued
                  and binding obligation of the Company (except to the extent
                  enforceability may be limited by applicable bankruptcy,
                  insolvency, reorganization, moratorium, fraudulent transfer or
                  other similar laws affecting the enforcement of creditors'
                  rights generally and by the effect of general principals of
                  equity, regardless of whether enforceability is considered in
                  a proceeding in equity or at law) when (i) the Registration
                  Statement, as finally amended (including any necessary
                  post-effective amendment), shall have become effective under
                  the Securities Act; (ii) the Preferred Securities Guarantee
                  shall have been qualified under the Trust Indenture Act of
                  1939, as amended (the "Trust Indenture Act"), and duly
                  executed and delivered by the Company and the Guarantee
                  Trustee; (iii) the Preferred Securities shall have been
                  legally issued; and (iv) the Preferred Securities Guarantee
                  shall have been duly executed and delivered as provided in the
                  Preferred Securities Guarantee Agreement.

         4.       The Debentures will be legally issued and binding obligations
                  of the Company (except to the extent enforceability may be
                  limited by applicable bankruptcy, insolvency, reorganization,
                  moratorium, fraudulent transfer or other similar laws
                  affecting the enforcement of creditors' rights generally and
                  by the effect of general principles of equity, regardless of
                  whether enforceability is considered in a proceeding in equity
                  or at law) when (i) the Registration Statement, as finally
                  amended (including any necessary post-effective amendments),
                  shall have become effective under the Securities Act, and the
                  Debenture Indenture shall have been qualified under the Trust
                  Indenture Act, and duly executed and delivered by the Company
                  and the Indenture Trustee; (ii) the Company's Board of
                  Directors or duly authorized committee thereof shall have duly
                  adopted final resolutions authorizing the issuance and sale of
                  the Debentures, as contemplated by the Registration Statement
                  and the Debenture Indenture; and (iii) the Debenture Indenture
                  under which such Debentures are to be issued shall have been
                  duly executed as provided in such resolutions and the
                  Debentures shall have been duly executed and authenticated as



<PAGE>

                  provided in the Indenture, and shall have been duly delivered
                  to the purchasers thereof against payment of the agreed
                  consideration therefor.

         5.       The Senior Notes will be legally issued and binding
                  obligations of the Company (except to the extent
                  enforceability may be limited by applicable bankruptcy,
                  insolvency, reorganization, moratorium, fraudulent transfer or
                  other similar laws affecting the enforcement of creditors'
                  rights generally and by the effect of general principles of
                  equity, regardless of whether enforceability is considered in
                  a proceeding in equity or at law) when (i) the Registration
                  Statement, as finally amended (including any necessary
                  post-effective amendments) shall have become effective under
                  the Securities Act, and the Senior Note Indenture shall have
                  been qualified under the Trust Indenture Act, and duly
                  executed and delivered by the Company and the Senior Note
                  Trustee; (ii) the Company's Board of Directors or duly
                  authorized committee thereof shall have duly adopted final
                  resolutions authorizing the issuance and sale of the Senior
                  Notes, as contemplated by the Registration Statement and the
                  Senior Note Indenture; and (iii) the Senior Note Indenture
                  under which such Senior Notes are to be issued shall have been
                  duly executed as provided in such resolutions and the Senior
                  Notes shall have been duly executed and authenticated as
                  provided in the Senior Note Indenture, and shall have been
                  duly delivered to the purchasers thereof against payment of
                  the agreed consideration therefor.

         For purposes of this opinion, I have assumed that there will be no
changes in the laws currently applicable to the Company and that such laws will
be the only laws applicable to the Company.

         I do not find it necessary for the purposes of this opinion to cover,
and accordingly I express no opinion as to, the application of the securities or
blue sky laws of the various states to the execution and delivery of the
Preferred Securities Guarantee or the sale of the Securities.

         The opinions expressed herein are limited to the laws of the State of
Michigan and the Federal laws of the United States of America.

          I note that each indenture and the debt securities will be governed
by, and construed in accordance with, the laws of the State of Michigan unless
the laws of another jurisdiction shall mandatorily apply. The rights, duties and
obligations of the subordinate note Trustee are governed by and construed in
accordance with the laws of the State of New York.



<PAGE>


         I hereby consent to the filing of this opinion as an exhibit to the
Company's Registration Statement on Form S-3 relating to the Securities and to
all references to me included in or made a part of the Registration Statement.


Very truly yours,


/s/Michael D. VanHemert
Michael D. VanHemert




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.(B)
<SEQUENCE>9
<FILENAME>k65350ex5-b.txt
<DESCRIPTION>OPINON OF SKADDEN, ARPS, SLATE, MEAGHER & FLOMM
<TEXT>
<PAGE>

                                                                    EXHIBIT 5(B)


                                                               November 21, 2001

Consumers Energy Company Financing V
Consumers Energy Company Financing VI
c/o Consumers Energy Company
212 West Michigan Avenue
Jackson, Michigan 49201

        Re:     Consumers Energy Company Financing V
                Consumers Energy Company Financing VI
                Registration Statement on Form S-3

Ladies and Gentlemen:

         We have acted as special Delaware counsel to Consumers Energy Company
Financing V and Consumers Energy Company Financing VI ( each, a "Trust" and
collectively, the "Trusts"), each a statutory business trust created under the
laws of the State of Delaware, in connection with the preparation of a
Registration Statement on Form S-3 (the "Registration Statement"), to be filed
by the Consumers Energy Company (the "Company") and the Trusts with the
Securities and Exchange Commission (the "Commission") on the date hereof under
the Securities Act of 1933, as amended (the "Act"). The Registration Statement
relates, among other things, to the issuance and sale from time to time pursuant
to Rule 415 of the General Rules and Regulations promulgated under the Act, of
Trust Preferred Securities (the "Preferred Securities") of each of the Trusts.

         The Preferred Securities of each of the Trusts are to be issued
pursuant to an Amended and Restated Declaration of Trust of such Trust (each, a
"Declaration" and collectively, the "Declarations"), each such Declaration being
among the Company, as sponsor, The Bank of New York, as property trustee (the
"Property Trustee"), The Bank of New York (Delaware), as Delaware trustee, and
Alan M. Wright and Thomas A. McNish, as administrative trustees.

<PAGE>

Consumers Energy Company Financing V
Consumers Energy Company Financing VI
November 21, 2001
Page 2

         This opinion is being delivered in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Act. Capitalized terms used but not
otherwise defined herein have the meanings ascribed to them in the Registration
Statement.

         In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement, (ii) the certificates of trust of each of the Trusts as filed with
the Secretary of State of the State of Delaware (collectively, the "Certificates
of Trust") and (iii) the form of the Declarations. We have also examined
originals or copies, certified or otherwise identified to our satisfaction, of
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.

         In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
executed documents or documents to be executed, we have assumed that the parties
thereto, other than the Trusts, have been duly organized and are validly
existing and in good standing under the laws of their respective jurisdiction of
organization and had or will have the power, corporate, trust or other, to enter
into and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and that such documents constitute
valid and binding obligations of such parties. In addition, we have assumed that
the Declarations of the Trusts, will be established so as not to violate,
conflict with or constitute a default under (i) any agreement or instrument to
which the Company or any of the Trusts or their respective property is subject,
(ii) any law, rule, or regulation to which the Company or either of the Trusts
is subject, (iii) any judicial or administrative order or decree of any
governmental authority or (iv) any consent, approval, license, authorization or
validation of, or filing, recording or registration with any governmental
authority. We have also assumed that the certificates evidencing the Preferred
Securities to be issued will be in a form that complies with, and the terms of
such Preferred Securities will be duly established in accordance with, the
Delaware Business Trust Act. As to any facts material to the opinions expressed
herein which were not independently established or verified, we have relied upon
oral or written

                                        2


<PAGE>

Consumers Energy Company Financing V
Consumers Energy Company Financing VI
November 21, 2001
Page 3

statements and representations of officers, trustees and other representatives
of the Company, the Trusts and others.

         We do not express any opinion as to the laws of any jurisdiction other
than the Business Trust Act of the State of Delaware.

         Based on and subject to the foregoing and to the other qualifications
and limitations set forth herein, we are of the opinion that the Preferred
Securities of each Trust to be offered pursuant to the Registration Statement
(the "Offered Preferred Securities"), when (i) the Registration Statement, as
finally amended (including all necessary post-effective amendments), has become
effective under the Act; (ii) an appropriate prospectus with respect to the
Offered Preferred Securities has been prepared, delivered and filed in
compliance with the Act and the applicable rules and regulations thereunder;
(iii) the Declaration of such Trust has been duly executed and delivered by the
parties thereto; (iv) the terms of the Offered Preferred Securities have been
established in accordance with the Declaration; (v) the Offered Preferred
Securities have been issued, executed and authenticated in accordance with the
Declaration and delivered and paid for in the manner contemplated in the
Registration Statement or any prospectus relating thereto; and (vi) if the
Offered Preferred Securities are to be sold pursuant to a firm commitment
underwritten offering, the underwriting agreement with respect to the Offered
Preferred Securities has been duly authorized, executed and delivered by the
applicable Trust and the other parties thereto, (1) the Offered Preferred
Securities will be duly authorized for issuance and will be validly issued,
fully paid and nonassessable, representing undivided beneficial interests in the
assets of such Trust and (2) the holders of the Offered Preferred Securities
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the Delaware
General Corporation Law. We bring to your attention, however, that the holders
of the Offered Preferred Securities may be obligated, pursuant to the
Declaration of such Trust, to (i) provide indemnity and/or security in
connection with, and pay taxes or governmental charges arising from, transfers
of Offered Preferred Securities and (ii) provide security and indemnity in
connection with the requests of or directions to the Property Trustee of such
Trust to exercise its rights and powers under the Declaration of such Trust.


                                        3


<PAGE>

Consumers Energy Company Financing V
Consumers Energy Company Financing VI
November 21, 2001
Page 4

         We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement. We also hereby consent to the use of
our name under the heading "Legal Matters" in the base prospectus included in
the Registration Statement. In giving this consent, we do not thereby admit that
we are within the category of persons whose consent is required under Section 7
of the Act or the rules and regulations of the Commission promulgated
thereunder. This opinion is expressed as of the date hereof unless otherwise
expressly stated, and we disclaim any undertaking to advise you of any
subsequent changes in the facts stated or assumed herein or of any subsequent
changes in applicable law.

                                    Very truly yours,

                                    /s/ Skadden, Arps, Slate, Meagher & Flom LLP


                                       4


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.A
<SEQUENCE>10
<FILENAME>k65350ex10-a.txt
<DESCRIPTION>SALES AGREEMENT DATED AS OF NOVEMBER 8, 2001
<TEXT>
<PAGE>

                               EXHIBIT 10(a)

                               SALE AGREEMENT








                               SALE AGREEMENT


                                  between


                           CONSUMERS FUNDING LLC
                                   Issuer


                                    and


                          CONSUMERS ENERGY COMPANY
                                   Seller






                        Dated as of November 8, 2001




<PAGE>
                             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

<PAGE>





                  SALE AGREEMENT, dated as of November 8, 2001, by and
between CONSUMERS FUNDING LLC, a Delaware limited liability company, as
issuer (the "Issuer"), and CONSUMERS ENERGY COMPANY, a Michigan
corporation, 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.


<PAGE>
                                 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 $468,592,000 (the "Initial Purchase Price") by
wire transfer of funds immediately available on the date hereof to Seller's
account no. 113-10 at Bank One, Detroit Michigan, routing transit # 0720
0032 6, 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 as confirmed by 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
<PAGE>
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, plus interest.

                  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, in each case 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;
<PAGE>

                  (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 received written notice from each Rating Agency that such Subsequent
Sale 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; 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.



<PAGE>

                                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); 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.
<PAGE>

                  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 Michigan UCC and
the Delaware 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 either the Michigan UCC or
the Delaware 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.

<PAGE>
                  (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;
<PAGE>

                           (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 (the "Trust Indenture"), or any
         Lien created by any other indenture, agreement or other instrument
         to which the Seller is a party or by which the Seller is bound;
         and the grant of a security interest in the Transferred
         Securitization Property pursuant to Section 2.01(e) of this
         Agreement will not breach any covenant in the Trust Indenture or
         in any such indenture, agreement or other instrument.

                           (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.

<PAGE>
                  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 Charges 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,

<PAGE>
                           (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
understood that the Issuer shall have no obligation to execute any such
instruments.

<PAGE>
                  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, license or single
business 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.
<PAGE>

                  (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.

                  (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,
<PAGE>

         (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 the Michigan and Delaware UCC,
                           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.

<PAGE>

                                  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.
<PAGE>

                  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.

<PAGE>


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


                                 CONSUMERS FUNDING LLC,
                                     as Issuer


                                 By: /s/ Thomas A. McNish
                                    ---------------------------------------
                                     Name:     Thomas A. McNish
                                     Title:    Manager


                                 CONSUMERS ENERGY COMPANY,
                                     as Seller


                                 By: /s/ Thomas A. McNish
                                    ---------------------------------------
                                     Name:     Thomas A. McNish
                                     Title:    Vice President and Secretary



<PAGE>

                                   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 all of the
Securitization Property (being the "Transferred Securitization Property"),
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 November 8, 2001 (the
"Sale Agreement") between the Issuer and the Seller.

                  This Bill of Sale shall be construed in accordance with
the laws of the State of Michigan, without reference to its conflict of law
provisions.

                  IN WITNESS WHEREOF, the Seller has duly executed and
delivered this Bill of Sale this 8th day of November, 2001.

                                 CONSUMERS ENERGY COMPANY,
                                 as Seller


                                 By:
                                    -----------------------------------------
                                 Name:
                                      ---------------------------------------
                                 Title:
                                       --------------------------------------


Accepted this 8th day of November, 2001.

CONSUMERS FUNDING LLC


By:
   --------------------------------------------------
Name:
     ------------------------------------------------
Title:
      -----------------------------------------------


<PAGE>


                                   EXHIBIT B

                              Opinion of Counsel



<PAGE>



                                   EXHIBIT C

                              Opinion of Counsel


<PAGE>



                                  APPENDIX A

                              MASTER DEFINITIONS

The definitions contained in this Appendix A are applicable to the singular
as well as the plural forms of such terms.

         Act has the meaning specified in Section 11.03(a) of the
         Indenture.

         Adjustment Date means (a) the first day of the first billing cycle
         of the Servicer in December of each year through December 2013 and
         (b) thereafter, as long as the Securitization Bonds are
         outstanding, the first day of the first billing cycle of the
         Servicer in March, June, September and December of each year,
         beginning with the billing cycle for December 2014.

         Adjustment Request means an application filed by the Servicer with
         the MPSC for a Securitization Charge Adjustment pursuant to
         Section 5 of the Issuer Annex.

         Administration Agreement means the Administration Agreement dated
         as of November 8, 2001, between Consumers, as administrator, and
         the Issuer, as the same may be amended or supplemented from time
         to time.

         Administrator means Consumers, as administrator under the
         Administration Agreement, and each successor to Consumers, in the
         same capacity, pursuant to Section 14 of the Administration
         Agreement.

         Affiliate means, with respect to any specified Person, any other
         Person controlling or controlled by or under common control with
         such specified Person. For the purposes of this definition,
         control when used with respect to any specified Person means the
         power to direct the management and policies of such Person,
         directly or indirectly, whether through the ownership of voting
         securities, by contract or otherwise; and the terms controlling
         and controlled have meanings correlative to the foregoing.

         Alternative Electric Suppliers means any third party, including
         any electric generation supplier, providing billing or metering
         services, licensed by the MPSC pursuant to relevant provisions of
         the Customer Choice Act, the MPSC Regulations and the Financing
         Order.

         Annual Accountant's Report has the meaning assigned to that term
         in Section 3.07 of the Servicing Agreement.

         Authorized Denominations means, with respect to any Series or
         Class of Securitization Bonds, $1,000 and integral multiples of
         $1.00 above that amount, provided, however, that one bond of each
         Class may have denomination of less than $1,000, or such other
         denominations as may be specified in the Series Supplement
         therefor.
<PAGE>

         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,
         the Intercreditor Agreement, any Bills of Sale, the Servicing
         Agreement, the Administration Agreement, the Indenture, the
         Underwriting Agreement, the Securities Account Control Agreement
         and any Interest Rate Swap Agreement, as each may be amended or
         supplemented from time to time.

         Bill of Sale means any bill of sale issued by the Seller to the
         Issuer pursuant to the Sale Agreement evidencing the sale of
         Securitization Property by the Seller to the Issuer.

         Billing Month means the schedule for current month billings (each
         billing month includes 21 billing segments regardless of the
         number of days in the current calendar month). For uniformity of
         customer billings, each customer's meter is read every 27 to 33
         days and billed in one of the 21 monthly billing segments.

         Book-Entry Securitization Bonds means beneficial interests in the
         Securitization Bonds, ownership and transfers of which shall be
         made through book entries by a Clearing Agency as described in
         Section 2.11 of the Indenture.

         Business Day means any day other than a Saturday or Sunday or a
         day on which banking institutions in the City of Jackson,
         Michigan, or in the City of New York, New York or, with respect to
         any Securitization Bonds listed on the Luxembourg Stock Exchange,
         in Luxembourg, are required or authorized by law or executive
         order to remain closed.

         Calculation Date means the day which is a Business Day at least 45
         days before each Adjustment Date on which the Servicer files an
         Adjustment Request.

         Capital Reserve Subaccount has the meaning specified in Section
         8.02(a) of the Indenture.

         Capital Subaccount has the meaning specified in Section 8.02(a) of
         the Indenture.

         Class means, with respect to any Series, any one of the classes of
         Securitization Bonds of that Series, as specified in the Series
         Supplement for that Series.

         Class Subaccount has the meaning specified in Section 8.02(a) of
         the Indenture.
<PAGE>

         Clearing Agency means an organization registered as a "clearing
         agency" pursuant to Section 17A of the Exchange Act.

         Clearing Agency Participant means a broker, dealer, bank, other
         financial institution or other Person for whom from time to time a
         Clearing Agency effects book-entry transfers and pledges of
         securities deposited with the Clearing Agency.

         Code means the Internal Revenue Code of 1986, as amended from time
         to time, and the treasury regulations promulgated thereunder.

         Collateral has the meaning specified in the Granting Clause of the
         Indenture.

         Collection Account has the meaning specified in Section 8.02(a) of
         the Indenture.

         Collection Curve means, with respect to a Billing Month, the
         forecast prepared by the Servicer of the percentages of amounts
         billed in a Billing Month that are expected to be received during
         each of the Billing Months for which the Collection Curve
         Percentage will be applied to determine the amount of
         Securitization Charges collected.

         Collection Curve Percentage means the percentages of amounts
         billed in a particular Billing Month that are expected to be
         received during that month. The initial Collection Curve
         Percentages are:

               First Billing Month's Collection Curve Percentage:     40.08%
               Second Billing Month's Collection Curve Percentage:    45.09%
               Third Billing Month's Collection Curve Percentage:     10.58%

         provided that the Collection Curve Percentages will be updated by
         Consumers periodically while the Securitization Bonds are
         outstanding using similar methodology.

         Commission means the U.S. Securities and Exchange Commission, and
         any successor thereof.

         Consumers means Consumers Energy Company, a Michigan corporation.

         Corporate Trust Office means the principal office of the Trustee
         at which at any particular time its corporate trust business shall
         be administered, which office at date of the execution of this
         Indenture is located at 5 Penn Plaza-16th floor, New York, New
         York 10001-1803, Attention: Corporate Trust-Asset Backed
         Securities (ABS), or at such other address as the Trustee may
         designate from time to time by notice to the Securitization
         Bondholders and the Issuer, or the principal corporate trust
         office of any successor Trustee (the address of which the
         successor Trustee will notify the Securitization Bondholders and
         the Issuer in writing).
<PAGE>

         Covenant Defeasance Option has the meaning specified in Section\
         4.01(b) of the Indenture.

         Customers means all electric customers taking delivery of
         electricity from Consumers or its successor on its MPSC-approved
         rate schedules and special contracts.

         Customer Choice Act means the Customer Choice and Electricity
         Reliability Act as set forth in Michigan Public Acts 2000 PA 141
         and 2000 PA 142 and effective on June 5, 2000.

         Daily Remittance Date means, if the Servicer has not satisfied the
         conditions of Section 5.11(b) of the Servicing Agreement, each
         Business Day commencing on the second Business Day following the
         date on which the Servicer ceases to satisfy such conditions.

         Default means any occurrence that is, or with notice or the lapse
         of time or both would become, an Event of Default.

         Defeasance Subaccount has the meaning specified in Section 8.02(a) of
         the Indenture.

         Definitive Securitization Bonds has the meaning specified in
         Section 2.11 of the Indenture.

         Delaware UCC means the Uniform Commercial Code, as in effect in
         the State of Delaware, as amended from time to time.

         DTC Agreement means the agreement between the Issuer, the Trustee
         and The Depository Trust Company, as the initial Clearing Agency,
         dated on or about November 8, 2001, relating to the Securitization
         Bonds, as the same may be amended or supplemented from time to
         time.

         Eligible Guarantor Institution means a firm or other entity
         identified in Rule 17Ad-15 under the Exchange Act as "an eligible
         guarantor institution," including (as such terms are defined
         therein):

                  (a)      a bank;

                  (b)      a broker, dealer, municipal securities broker or
                           dealer or government securities broker or dealer;

                  (c)      a credit union;

                  (d)      a national securities exchange, registered
                           securities association or clearing agency; or

                  (e)      a savings association that is a participant in a
                           securities transfer association.


<PAGE>
         Eligible Institution means:

                  (a)      the corporate trust department of the Trustee,
                           so long as any of the securities of the Trustee
                           have a credit rating from each Rating Agency in
                           one of its generic rating categories which
                           signifies investment grade, or

                  (b)      a depositary institution organized under the laws
                           of the United States of America or any State (or
                           any domestic branch of a foreign bank), which

                           (i)      has either

                                    (A)     with respect to any Eligible
                                            Investment having a maturity of
                                            greater than one month, a
                                            long-term unsecured debt rating
                                            of "AA-" by Standard & Poor's
                                            and Fitch and "Aa3" by Moody's,
                                            or

                                    (B)     with respect to any Eligible
                                            Investment having a maturity
                                            one month or less, a
                                            certificate of deposit rating
                                            of "A-1+" by Standard & Poor's,
                                            "P-1" by Moody's and "F1+" by
                                            Fitch, or any other long-term,
                                            short-term or certificate
of\                                            deposit rating acceptable to
                                            the Rating Agencies, and

                           (ii)     whose deposits are insured by the FDIC.

         Eligible Investments mean book-entry securities, negotiable
         instruments or securities represented by instruments in bearer or
         registered form which evidence:

                  (a)      direct obligations of, and obligations fully and
                           unconditionally guaranteed as to timely payment by,
                           the United States of America;

                  (b)      demand deposits, time deposits or certificates of
                           deposit of any depository institution or trust
                           company (any depositary institution or trust
                           company being referred to in this definition as a
                           "financial institution") incorporated under the
                           laws of the United States of America or any State
                           thereof (or any domestic branch of a foreign bank)
                           and subject to supervision and examination by
                           Federal or State banking or depositary institution
                           authorities; provided, however, that at the time of
                           the investment or contractual commitment to invest
                           therein, the commercial paper or other short-term
                           unsecured debt obligations (other than such
                           obligations the rating of which is based on the
                           credit of a Person other than such depositary
                           institution or trust company) thereof shall have a
                           credit rating from each of the Rating Agencies in
                           the highest investment category granted thereby;

                  (c)      commercial paper or other short term obligations
                           of any corporation organized under the laws of
                           the United States of America (other than
                           Consumers) whose ratings, at the time of the
                           investment or contractual commitment to invest
                           therein, from each of the Rating Agencies are in
                           the highest investment category granted thereby;

                  (d)      investments in money market funds having a
                           rating from each of the Rating Agencies in the
                           highest investment category granted thereby
                           (including funds for which the Trustee or any of
                           its Affiliates act as investment manager or
                           advisor);

                  (e)      bankers' acceptances issued by any depositary
                           institution or trust company referred to in clause
                           (b) above;

                  (f)      repurchase obligations with respect to any
                           security that is a direct obligation of, or
                           fully guaranteed by, the United States of
                           America or any agency or instrumentality thereof
                           the obligations of which are backed by the full
                           faith and credit of the United States of
                           America, in either case entered into with a
                           depositary institution or trust company (acting
                           as principal) described in clause (b) above;
<PAGE>

                  (g)      repurchase obligations with respect to any security
                           or whole loan entered into with

                           (i)      a financial institution (acting as
                                    principal) described in clause (b) above,

                           (ii)     a broker/dealer (acting as principal)
                                    registered as a broker or dealer under
                                    Section 15 of the Exchange Act (any
                                    broker/dealer being referred to in this
                                    definition as a "broker/dealer"), the
                                    unsecured short-term debt obligations
                                    of which are rated P-1 by Moody's, A-
                                    1+ by Standard & Poor's and F1+ by
                                    Fitch at the time of entering into this
                                    repurchase obligation, or

                           (iii)    an unrated broker/dealer, acting as
                                    principal, that is a wholly- owned
                                    subsidiary of a non-bank or bank
                                    holding company the unsecured
                                    short-term debt obligations of which
                                    are rated P-1 by Moody's, A-1+ by
                                    Standard & Poor's and F1+ by Fitch at
                                    the time of purchase; or

                  (h)      any other investment permitted by each Rating Agency;

         provided, however, that, with respect to Moody's only, the obligor
         related to clauses (b), (c), (e), (f) and (g) above must have both a
         long term rating of at least A1 and a short term rating of at least
         P-1, and provided further, that, unless otherwise permitted by each
         Rating Agency, upon the failure of any Eligible Institution to
         maintain any applicable rating set forth in this definition or the
         definition of Eligible Institution, the related investments at such
         institution shall be reinvested in Eligible Investments at a
         successor Eligible Institution within 10 days, and provided, further,
         that, any Eligible Investment must not:

                  (a)      be sold, liquidated or otherwise disposed of at a
                           loss, prior to the maturity thereof, or

                  (b)      mature later than (i) the date on which the
                           proceeds of such Eligible Investment will be
                           required to be on deposit in the Collection Account
                           in order for the Trustee to make all required and
                           scheduled payments and deposits into Subaccounts
                           under the Indenture, if such Eligible Investment is
                           held by an Affiliate of the Trustee, or (ii) the
                           Business Day prior to the date on which the
                           proceeds of such Eligible Investment will be
                           required to be on deposit in the Collection Account
                           in order for the Trustee to make all required and
                           scheduled payments and deposits into Subaccounts
                           under the Indenture, if such Eligible Investment is
                           not held by an Affiliate of the Trustee; provided,
                           however that with respect to the period prior to
                           the first Payment Date any Eligible Investment must
                           not have a maturity of greater than six months.
<PAGE>

         Eligible Securities Account means either:

                  (a)      a segregated trust account with an Eligible
                           Institution or

                  (b)      a segregated trust account with the corporate
                           trust department of a depositary institution
                           organized under the laws of the United States of
                           America or any State (or any domestic branch of
                           a foreign bank), having corporate trust powers
                           and acting as trustee for funds deposited in
                           such account, so long as any of the securities
                           of such depositary institution shall have a
                           credit rating from each Rating Agency in one of
                           its generic rating categories which signifies
                           investment grade.

         Event of Default has the meaning specified in Section 5.01 of the
         Indenture.

         Exchange Act means the Securities Exchange Act of 1934, as
         amended.

         Expected Amortization Schedule means, with respect to each Series
         or, if applicable, each Class of Securitization Bonds, the
         expected amortization schedule for principal thereof, as specified
         in the Series Supplement therefor.

         Expected Final Payment Date means, with respect to each Series or, if
         applicable, each Class of Securitization Bonds, the date when all
         interest and principal is scheduled to be paid with respect to that
         Series or Class in accordance with the Expected Amortization
         Schedule, as specified in the Series Supplement therefor.

         Filing Office means the Office of the of the Secretary of State of
         the State of Michigan or the Office of the Secretary of State of
         the State of Delaware, as applicable.

         Final Maturity Date means, for each Series or, if applicable, each
         Class of Securitization Bonds, the date by which all principal of
         and interest on such Series or Class of Securitization Bonds is
         required to be paid, as specified in the Series Supplement
         therefor.

         Financing Issuance means an issuance of a new Series of
         Securitization Bonds under the Indenture to provide funds to
         finance the purchase by the Issuer of Securitization Property.

         Financing Order means the Opinion and Order issued on October 24,
         2000 and the Order Granting Rehearing issued on January 12, 2001
         by the MPSC (MPSC Docket Number U- 12505) with respect to
         Consumers.

<PAGE>
         Fitch means Fitch, Inc., or its successor.

         Formation Documents means, collectively, the Issuer LLC Agreement,
         the Issuer Certificate of Formation and any other document
         pursuant to which the Issuer is formed or governed, as each may be
         amended or supplemented from time to time.

         General Subaccount has the meaning specified in Section 8.02(a) of
         the Indenture.

         Grant means mortgage, pledge, bargain, sell, warrant, alienate,
         remise, release, convey, assign, transfer, create, and grant a
         lien upon and a security interest in and right of set-off against,
         deposit, set over and confirm. A Grant of the Collateral or of any
         other agreement or instrument shall include all rights, powers and
         options (but none of the obligations) of the Granting party
         thereunder, including the immediate and continuing right to claim
         for, collect, receive and give receipt for principal, interest and
         other payments in respect of the Collateral and all other moneys
         payable thereunder, to give and receive notices and other
         communications, to make waivers or other agreements, to exercise
         all rights and options, to bring Proceedings in the name of the
         Granting party or otherwise and generally to do and receive
         anything that the Granting party is or may be entitled to do or
         receive thereunder or with respect thereto.

         Holder or Securitization Bondholder means the Person in whose name
         a Securitization Bond of any Series or Class is registered in the
         Securitization Bond Register.

         Indemnified Person has the meaning specified in Section 5.02 of
         the Servicing Agreement.

         Indemnity Amount means the amount of any indemnification
         obligation payable under the Basic Documents.

         Indenture means the Indenture dated as of November 8, 2001,
         between the Issuer and the Trustee, as the same may be amended and
         supplemented from time to time by one or more Supplemental
         Indentures, and shall include each Series Supplement and the forms
         and terms of the Securitization Bonds established thereunder.

         Independent means, when used with respect to any specified Person,
         that the Person

                  (a)      is in fact independent of the Issuer, any other
                           obligor upon the Securitization Bonds, Consumers,
                           the Servicer (if different from Consumers) and any
                           Affiliate of any of the foregoing Persons,

                  (b)      does not have any direct financial interest or
                           any material indirect financial interest in the
                           Issuer, any such other obligor, Consumers or any
                           Affiliate of any of the foregoing Persons, and
<PAGE>

                  (c)      is not connected with the Issuer, any such other
                           obligor, Consumers or any Affiliate of any of
                           the foregoing Persons as an officer, employee,
                           promoter, underwriter, trustee, partner,
                           director or person performing similar functions.

         Independent Certificate means a certificate or opinion to be
         delivered to the Trustee under the circumstances described in, and
         otherwise complying with, the applicable requirements of Section
         11.01 of the Indenture, made by an Independent appraiser or other
         expert appointed by an Issuer Order and approved by the Trustee in
         the exercise of reasonable care, and such opinion or certificate
         shall state that the signer has read the definition of
         "Independent" in this Appendix A and that the signer is
         Independent within the meaning thereof.

         Independent Manager has the meaning set forth in the Issuer LLC
         Agreement.

         Initial Purchase Price has the meaning set forth in Section
         2.01(a) of the Sale Agreement.

         Initial Transfer Date means the Series Issuance Date for the first
         Series of Securitization Bonds.

         Initial Transferred Securitization Property means the
         Securitization Property sold, assigned and/or transferred by the
         Seller to the Issuer as of the Initial Transfer Date pursuant to
         the Sale Agreement and the Bill of Sale delivered on or prior to
         the Initial Transfer Date as identified in such Bill of Sale.

         Insolvency Event means, with respect to a specified Person,

                  (a)      the filing of a decree or order for relief by a
                           court having jurisdiction in the premises in
                           respect of such Person or any substantial part of
                           its property in an involuntary case under any
                           applicable Federal or State bankruptcy, insolvency
                           or other similar law now or hereafter in effect, or
                           appointing a receiver, liquidator, assignee,
                           custodian, trustee, sequestrator or similar
                           official for such Person or for any substantial
                           part of its property, or ordering the winding-up or
                           liquidation of such Person's affairs, and such
                           decree or order shall remain unstayed and in effect
                           for a period of 90 consecutive days or

                  (b)      the commencement by such Person of a voluntary case
                           under any applicable Federal or State bankruptcy,
                           insolvency or other similar law now or hereafter in
                           effect, or the consent by such Person to the entry
                           of an order for relief in an involuntary case under
                           any such law, or the consent by such Person to the
                           appointment of or taking possession by a receiver,
                           liquidator, assignee, custodian, trustee,
                           sequestrator or similar official for such Person or
                           for any substantial part of its property, or the
                           making by such Person of any general assignment for
                           the benefit of creditors, or the failure by such
                           Person generally to pay its debts as such debts
                           become due, or the taking of action by such Person
                           in furtherance of any of the foregoing.

<PAGE>
         Intercreditor Agreement means: (i) the Intercreditor Agreement
         dated as of November 8, 2001 (the "Initial Intercreditor
         Agreement"), among Consumers, the Trustee, the Issuer, Canadian
         Imperial Bank of Commerce and Asset Securitization Cooperative
         Corporation, as amended and supplemented from time to time; or
         (ii) any subsequent intercreditor agreement entered into by the
         Trustee pursuant to Section 18(b) of the Initial Intercreditor
         Agreement.

         Interest means, for any Payment Date for any Series or Class of
         Securitization Bonds, the sum, without duplication, of:

                  (a)      an amount equal to the amount of interest
                           accrued at the applicable Interest Rate from the
                           prior Payment Date with respect to that Series
                           or Class;

                  (b)      any unpaid interest, plus any interest accrued on
                           this unpaid interest at the applicable Interest
                           Rate, to the extent permitted by applicable law;

                  (c)      if the Securitization Bonds have been declared due
                           and payable, all accrued and unpaid interest
                           thereon; and

                  (d)      with respect to a Series or Class to be redeemed
                           prior to the next Payment Date, the amount of
                           interest that will be payable as interest on
                           such Series or Class upon such redemption.

         Interest Rate means, with respect to each Series or Class of
         Securitization Bonds, the rate at which interest accrues on the
         principal balance of Securitization Bonds of such Series or Class,
         as specified in the Series Supplement therefor.

         Interest Rate Swap Agreement means any interest rate swap
         agreement entered into by the Issuer with respect to any Series or
         Class of Securitization Bonds, including, without limitation, the
         ISDA Master Agreement and the related Schedule and Confirmation
         between the Issuer and a Swap Counterparty, as same may be amended
         or supplemented from time to time.

         Issuer means Consumers Funding LLC, a Delaware limited liability
         company, or its successor under the Indenture or the party named
         as such in the Indenture until a successor replaces it and,
         thereafter, means the successor.

         Issuer Annex means Annex 1 of the Servicing Agreement.

         Issuer Certificate of Formation means the Amended and Restated
         Certificate of Formation of the Issuer which was filed with the
         Delaware Secretary of State's Office on November 6, 2001, as the
         same may be amended or supplemented from time to time.

<PAGE>
         Issuer LLC Agreement means the Amended and Restated Limited
         Liability Company Agreement between the Issuer and Consumers, as
         sole Member, dated as of November 8, 2001, as the same may be
         amended or supplemented from time to time.

         Issuer Officer's Certificate means a certificate signed by any
         Authorized Officer of the Issuer, under the circumstances
         described in, and otherwise complying with, the applicable
         requirements of Section 11.01 of the Indenture, and delivered to
         the Trustee. Unless otherwise specified, any reference in the
         Indenture to an Officer's Certificate shall be to an Officer's
         Certificate of any Authorized Officer of the Issuer.

         Issuer Opinion of Counsel means one or more written opinions of
         counsel who may, except as otherwise expressly provided in the
         Indenture, be employees of or counsel to the Issuer or the Seller
         and who shall be reasonably satisfactory to the Trustee, and which
         opinion or opinions shall be addressed to the Trustee, and shall
         be in a form reasonably satisfactory to the Trustee.

         Issuer Order or Issuer Request means a written order or request,
         respectively, signed in the name of the Issuer by any one of its
         Authorized Officers and delivered to the Trustee.

         Legal Defeasance Option has the meaning specified in Section
         4.01(b) of the Indenture.

         Lien means a security interest, lien, charge, pledge, equity or
         encumbrance of any kind.

         Losses means collectively, any and all liabilities, obligations,
         losses, damages, payments, costs or expenses of any kind
         whatsoever.

         Manager has the meaning set forth in the Issuer LLC Agreement.

         Member means Consumers, as the sole member of the Issuer, in its
         capacity as such member under the Issuer LLC Agreement.

         Michigan UCC means the Uniform Commercial Code, as in effect in
         the State of Michigan, as amended from time to time.

         Monthly Remittance Date means the 19th day of each calendar month
         (or if such day is not a Business Day, the preceding Business
         Day).

         Monthly Servicing Fee means the fee payable to the Servicer on a
         monthly basis for services rendered, in accordance with Section
         5.07 of the Servicing Agreement.

         Moody's means Moody's Investors Service, Inc., or its successor.

         MPSC means the Michigan Public Service Commission or its
         successor.
<PAGE>

         MPSC Regulations means any regulations, orders, guidelines or
         directives promulgated, issued or adopted by the MPSC, as in
         effect from time to time.

         Officers' Certificate means, with respect to a corporation, a
         certificate signed by the chairman of the board, the president,
         the vice chairman of the board, any executive vice president, any
         vice president, the treasurer or the secretary of such company,
         and with respect to a limited liability company, any Manager.

         Operating Expenses means, with respect to the Issuer, all fees,
         costs, expenses and indemnity payments owed by the Issuer,
         including, without limitation, all amounts owed by the Issuer to
         the Trustee, the Monthly Servicing Fee, the fees and expenses
         payable by the Issuer to the Administrator under the
         Administration Agreement, the fees and expenses payable by the
         Issuer to the Independent Managers and Special Members of the
         Issuer, fees of the Rating Agencies, legal fees and expenses of
         the Servicer pursuant to Section 3.10 of the Servicing Agreement,
         legal and accounting fees, costs and expenses of the Issuer and
         legal, accounting or other fees, costs and expenses of the Seller
         (including, without limitation, any costs and expenses incurred by
         the Seller pursuant to Section 4.09 of the Sale Agreement) under
         or in connection with the Basic Documents or the Financing Order.

         Opinion of Counsel means one or more written opinions of counsel who
         may be an employee of or counsel to Consumers, the Issuer or any
         other Person (as the context may require), which counsel shall be
         reasonably acceptable to the Trustee, the Issuer or the Rating
         Agencies, as applicable, and which shall be in form reasonably
         satisfactory to the Trustee, if applicable.

         Outstanding with respect to Securitization Bonds means, as of the
         date of determination, all Securitization Bonds theretofore
         authenticated and delivered under the Indenture except:

                  (a)      Securitization Bonds theretofore canceled by the
                           Securitization Bond Registrar or delivered to the
                           Securitization Bond Registrar for cancellation;

                  (b)      Securitization Bonds or portions thereof the
                           payment for which money in the necessary amount
                           has been theretofore deposited with the Trustee
                           or any Paying Agent in trust for the Holders of
                           such Securitization Bonds; provided, however,
                           that if such Securitization Bonds are to be
                           redeemed, notice of such redemption has been
                           duly given pursuant to the Indenture or
                           provision therefor, satisfactory to the Trustee,
                           made; and

                  (c)      Securitization Bonds in exchange for or in lieu
                           of other Securitization Bonds which have been
                           authenticated and delivered pursuant to the
                           Indenture unless proof satisfactory to the
                           Trustee is presented that any such
                           Securitization Bonds are held by a protected
                           purchaser;
<PAGE>

         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.
<PAGE>

         Predecessor Securitization Bond means, with respect to any
         particular Securitization Bond, every previous Securitization Bond
         evidencing all or a portion of the same debt as that evidenced by
         such particular Securitization Bond; and, for the purpose of this
         definition, any Securitization Bond authenticated and delivered
         under Section 2.06 of the Indenture in lieu of a mutilated, lost,
         destroyed or stolen Securitization Bond shall be deemed to
         evidence the same debt as the mutilated, lost, destroyed or stolen
         Securitization Bond.

         Principal means, with respect to any Payment Date and each Series
         or Class of Securitization Bonds:

                  (a)      the amount of principal scheduled to be paid on
                           such Payment Date in accordance with the Expected
                           Amortization Schedule;

                  (b)      the amount of principal due on the Final Maturity
                           Date of any Series or Class if such Payment Date is
                           the Final Maturity Date;

                  (c)      the amount of principal due as a result of the
                           occurrence and continuance of an Event of Default
                           and acceleration of the Securitization Bonds;

                  (d)      the amount of principal and premium, if any, due as
                           a result of a redemption of Securitization Bonds on
                           such Payment Date; and

                  (e)      any overdue payments of principal.

         Pro Rata has the meaning set forth in Section 8.02(l) of the
         Indenture.

         Proceeding means any suit in equity, action at law or other
         judicial or administrative proceeding.

         Projected Securitization Bond Balance means, as of any date, the
         sum of the amounts provided for in the Expected Amortization
         Schedules for each Outstanding Series of Securitization Bonds as
         of such date.

         Rating Agency means, as of any date, any rating agency rating the
         Securitization Bonds of any Class or Series at the time of
         issuance thereof at the request of the Issuer. If no such
         organization or successor is any longer in existence, "Rating
         Agency" shall be a nationally recognized statistical rating
         organization or other comparable Person designated by the Issuer,
         notice of which designation shall be given to the Trustee, the
         Member and the Servicer.

         Rating Agency Condition means, with respect to any action, the
         notification by the Trustee to each Rating Agency of such action
         and the notification from each of Fitch and S&P to the Trustee and
         the Issuer that such action will not result in a reduction or
         withdrawal of the then current rating by such Rating Agency of any
         Outstanding Series or Class of Securitization Bonds.
<PAGE>

         Record Date has the meaning set forth in each Supplemental
         Indenture.

         Redemption Date means, with respect to each Series or Class of
         Securitization Bonds, the date for the redemption of the
         Securitization Bonds of such Series or Class pursuant to Sections
         10.01 or 10.02 of the Indenture or the Series Supplement for such
         Series or Class, which in each case shall be a Payment Date.

         Redemption Price has the meaning set forth in Section 10.01 of the
         Indenture.

         Refunding Issuance means an issuance of a new Series of
         Securitization Bonds under the Indenture to pay the cost of
         refunding, through redemption or payment on the Expected Final
         Payment Date for a Series or Class of Securitization Bonds, all or
         part of the Securitization Bonds of such Series or Class to the
         extent permitted by the terms thereof.

         Released Parties has the meaning specified in Section 5.02(e) of
         the Servicing Agreement.

         Remittance Date means a Daily Remittance Date or a Monthly
         Remittance Date, as applicable.

         Required Capital Amount means with respect to any Series, the
         amount required to be deposited in the Capital Subaccount on the
         Series Issuance Date of such Series, as specified in the related
         Series Supplement.

         Reserve Subaccount has the meaning specified in Section 8.02(a) of
         the Indenture.

         Responsible Officer means, with respect to the Trustee, any
         officer assigned to the Corporate Trust Division (or any successor
         thereto), including any vice president, assistant vice president,
         trust officer, secretary, assistant secretary, or any other
         officer of the Trustee customarily performing functions similar to
         those performed by any of the above designated officers, in each
         case having direct responsibility for the administration of the
         Indenture.

         Retiring Trustee has the meaning specified in Section 6.08(b) of
         the Indenture.

         Sale Agreement means the Sale Agreement dated November 8, 2001
         between the Seller and the Issuer, as the same may be amended or
         supplemented from time to time.

         Scheduled Overcollateralization Level means, with respect to each
         Series and any Payment Date, the amount with respect to such
         Series set forth as such in Schedule B of the Series Supplement.

         Secured Obligations has the meaning set forth in the Granting
         Clause of the Indenture.
<PAGE>

         Securities Account Control Agreement means the securities account
         control agreement dated as of November 8, 2001, by and between
         Consumers Funding LLC, as debtor, the Trustee as the secured party
         and The Bank of New York, in its capacity as securities
         intermediary thereunder.

         Securitization Bond means any of the Securitization Bonds (as
         defined in the Customer Choice Act) issued by the Issuer pursuant
         to the Indenture.

         Securitization Bond Balance means, as of any date, the aggregate
         Outstanding Amount of all Series of Securitization Bonds on such
         date.

         Securitization Bond Register has the meaning specified in Section
         2.05(a) of the Indenture.

         Securitization Bond Registrar has the meaning specified in Section
         2.05(a) of the Indenture.

         Securitization Charge means the nonbypassable amounts to be
         charged for the use or availability of electric services (but does
         not include tax charges authorized by the Financing Order),
         approved by the MPSC under the Financing Order, to fully recover
         qualified costs, to be collected by Consumers, its successors,
         assignees or other collection agents, as provided for in the
         Financing Order.

         Securitization Charge Adjustment means each adjustment to the
         Securitization Charge related to the Transferred Securitization
         Property made in accordance with Section 4.01 of the Servicing
         Agreement, the Issuer Annex and the Financing Order.

         Securitization Charge Rate means the amount of the surcharge
         applied to all kilowatt- hours (KWh) billed to determine the
         amount of the Securitization Charges.

         Securitization Charge Collections means amounts received by the
         Servicer in respect of the Securitization Charge as determined by
         the Servicer in accordance with the allocation methodology set
         forth in Annex 2 to the Servicing Agreement.

         Securitization Property has the meaning assigned to that term in
         the Customer Choice Act and as approved with respect to Consumers
         in the Financing Order.

         Securitization Property Documentation means all documents relating
         to the Transferred Securitization Property, including copies of
         the Financing Order and all documents filed with the MPSC in
         connection with any Securitization Charge Adjustment.

         Securitization Ratio means for an entire Billing Month the total
         Securitization Charges billed by the Servicer for each rate class
         divided by the total charges billed by Consumers and the Servicer
         for each rate class to customers for such Billing Month. Customers
         for this purpose refers to Consumers' electric and combination
         electric and gas customers (and not gas only customers).

         Seller means Consumers, in its capacity as seller of the
         Securitization Property to the Issuer pursuant to the Sale
         Agreement.

<PAGE>
         Series means any series of Securitization Bonds issued by the
         Issuer and authenticated by the Trustee pursuant to the Indenture,
         as specified in the Series Supplement therefor.

         Series Capital Subaccount has the meaning specified in Section
         8.02(a) of the Indenture.

         Series Issuance Date means, with respect to any Series, the date
         on which the Securitization Bonds of such Series are to be
         originally issued in accordance with Section 2.10 of the Indenture
         and the Series Supplement for such Series.

         Series Overcollateralization Subaccount has the meaning specified
         in Section 8.02(a) of the Indenture.

         Series Subaccount has the meaning specified in Section 8.02(a) of
         the Indenture.

         Series Supplement means an indenture supplemental to the Indenture
         that authorizes a particular Series of Securitization Bonds, as
         the same may be amended or supplemented from time to time.

         Servicer means Consumers, as the servicer of the Securitization
         Property, and each successor to Consumers (in the same capacity)
         pursuant to Section 5.03, 5.04 or 6.04 of the Servicing Agreement.

         Servicer Default means an event specified in Section 6.01 of the
         Servicing Agreement.

         Servicing Agreement means the Servicing Agreement dated as of
         November 8, 2001 between the Issuer and the Servicer, as the same
         may be amended and supplemented from time to time.

         Special Member has the meaning set forth in the Issuer LLC
         Agreement.

         Standard & Poor's, or S&P, means Standard & Poor's Ratings Group,
         a division of The McGraw-Hill Companies, or its successor.

         State means any one of the 50 states of the United States of
         America or the District of Columbia.

         Subaccount means any of the subaccounts of the Collection Account
         specified in Section 8.02 of the Indenture.

         Subsequent Sale means the sale of additional Securitization
         Property by the Seller to the Issuer after the Initial Transfer
         Date, subject to the satisfaction of the conditions specified in
         the Sale Agreement and the Indenture.

         Subsequent Transfer Date means the date that a sale of Subsequent
         Transferred Securitization Property will be effective, as
         specified in a written notice provided by the Seller to the Issuer
         pursuant to the Sale Agreement.

<PAGE>
         Subsequent Transferred Securitization Property means
         Securitization Property sold by the Seller to the Issuer as of a
         Subsequent Transfer Date pursuant to the Sale Agreement and the
         Bill of Sale delivered on or prior to the Subsequent Transfer Date
         as identified in such Bill of Sale.

         Successor Servicer has the meaning specified in Section 3.19(i) of
         the Indenture.

         Supplemental Indenture means a supplemental indenture entered into
         by the Issuer and the Trustee pursuant to Article IX of the
         Indenture.

         Swap Counterparty means, with respect to any Interest Rate Swap
         Agreement, the swap counterparty under that Interest Rate Swap
         Agreement.

         Termination Notice has the meaning specified in Section 6.01(d) of
         the Servicing Agreement.

         Transfer Date means the Initial Transfer Date or any Subsequent
         Transfer Date, as applicable.

         Transferred Securitization Property means Securitization Property
         which has been sold, assigned and/or transferred to the Issuer
         pursuant to the Sale Agreement and the Bill of Sale.

         Trust Indenture Act or TIA means the Trust Indenture Act of 1939,
         as in force on the date hereof, unless otherwise specifically
         provided.

         Trustee means The Bank of New York, a New York banking
         corporation, or its successor, as trustee under the Indenture, or
         any successor Trustee under the Indenture.

         UCC means the Uniform Commercial Code, as in effect in the
         relevant jurisdiction, as amended from time to time.

         Underwriting Agreement means the Underwriting Agreement dated as
         of October 31, 2001 among the Seller, the Issuer and Morgan
         Stanley & Co. Incorporated, on behalf of itself and as the
         representative of the several underwriters named therein.

         U.S. Government Obligations means direct obligations (or
         certificates representing an ownership interest in such
         obligations) of the United States of America (including any agency
         or instrumentality thereof) for the payment of which the full
         faith and credit of the United States of America is pledged and
         which are not callable at the issuer's option.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.B
<SEQUENCE>11
<FILENAME>k65350ex10-b.txt
<DESCRIPTION>SERVICING AGREEMENT DATED AS OF NOVEMBER 8, 2001
<TEXT>
<PAGE>


                               EXHIBIT 10(b)

                            SERVICING AGREEMENT






                            SERVICING AGREEMENT


                                  between


                           CONSUMERS FUNDING LLC
                                  Issuer


                                    and


                         CONSUMERS ENERGY COMPANY
                                 Servicer






                       Dated as of November 8, 2001



<PAGE>

<TABLE>
<CAPTION>

                             TABLE OF CONTENTS


                                 ARTICLE I

                                Definitions

<S>          <C>                                                                      <C>
SECTION 1.01  Definitions..............................................................1
SECTION 1.02  Other Definitional Provisions............................................1

                                 ARTICLE II

                 Appointment and Authorization of Servicer

SECTION 2.01  Appointment of Servicer; Acceptance of Appointment.......................2
SECTION 2.02  Authorization............................................................2
SECTION 2.03  Dominion and Control over Transferred Securitization Property............2

                                ARTICLE III

                              Billing Services

SECTION 3.01  Duties of Servicer.......................................................3
SECTION 3.02  Collection and Allocation of the Securitization Charges..................4
SECTION 3.03  Payment of Securitization Charge Collections.............................5
SECTION 3.04  Servicing and Maintenance Standards......................................5
SECTION 3.05  Servicer's Certificates..................................................6
SECTION 3.06  Annual Statement as to Compliance........................................6
SECTION 3.07  Annual Independent Certified Public Accountants' Report..................6
SECTION 3.08  Securitization Property Documentation....................................7
SECTION 3.09  Computer Records; Audits of Documentation................................7
SECTION 3.10  Defending Transferred Securitization Property Against Claims.............8
SECTION 3.11  Opinions of Counsel......................................................8

                                 ARTICLE IV

           Services Related to Securitization Charge Adjustments

SECTION 4.01  Securitization Charge Adjustments........................................9

                                 ARTICLE V

                                The Servicer

SECTION 5.01  Representations and Warranties of Servicer...............................9
SECTION 5.02  Indemnities of Servicer; Release of Claims..............................11
SECTION 5.03  Merger or Consolidation of, or Assumption of the Obligations of, .......13
SECTION 5.04  Assignment of Servicer's Obligations....................................14
SECTION 5.05  Limitation on Liability of Servicer.....................................14
SECTION 5.06  Consumers Not To Resign as Servicer.....................................15
SECTION 5.07  Monthly Servicing Fee...................................................15
SECTION 5.08  Servicer Expenses.......................................................15
SECTION 5.09  Subservicing............................................................15
SECTION 5.10  No Servicer Advances....................................................15
SECTION 5.11  Remittances.............................................................15
SECTION 5.12  Protection of Title.....................................................16

                                 ARTICLE VI

                              Servicer Default

SECTION 6.01  Servicer Default........................................................16
SECTION 6.02  Notice of Servicer Default..............................................18
SECTION 6.03  Waiver of Past Defaults.................................................18
SECTION 6.04  Appointment of Successor................................................18
SECTION 6.05  Cooperation with Successor..............................................19

                                ARTICLE VII

                          Miscellaneous Provisions

SECTION 7.01  Amendment...............................................................19
SECTION 7.02  Notices.................................................................20
SECTION 7.03  Limitations on Rights of Others.........................................20
SECTION 7.04  Severability............................................................20
SECTION 7.05  Separate Counterparts...................................................21
SECTION 7.06  Headings................................................................21
SECTION 7.07  GOVERNING LAW...........................................................21
SECTION 7.08  Assignment to the Trustee...............................................21
SECTION 7.09  Nonpetition Covenants...................................................21
SECTION 7.10  Termination.............................................................21


ANNEX 1       Securitization Charge Adjustment Process and Reports--
ANNEX 2       Securitization Calculation Process

APPENDIX A    Master Definitions

</TABLE>

<PAGE>


         SERVICING AGREEMENT, dated as of November 8, 2001, by and between
CONSUMERS FUNDING LLC, a Delaware limited liability company, as issuer (the
"Issuer"), and CONSUMERS ENERGY COMPANY, a Michigan corporation
("Consumers"), as the servicer of the Securitization Property hereunder
(together with each successor to Consumers (in the same capacity) pursuant
to Section 5.03, 5.04 or 6.04, the "Servicer").


                            W I T N E S S E T H:


         WHEREAS Consumers is willing to service the Transferred
Securitization Property purchased from the Seller by the Issuer pursuant to
the Sale Agreement between the Issuer and the Seller; and


         WHEREAS the Issuer, in connection with ownership of Transferred
Securitization Property, desires to engage Consumers to carry out the
functions described herein.


         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound hereby, the parties hereto agree as follows:

                                 ARTICLE I

                                Definitions

         SECTION 1.01 Definitions. Capitalized terms used but not
otherwise defined herein have the meanings assigned to them in Appendix A
hereto.

         SECTION 1.02 Other Definitional Provisions.

         (a) "Agreement" means this Servicing Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.

         (b) Non-capitalized terms used herein which are defined in the
Customer Choice Act, as the context requires, have the meanings assigned to
such terms in the Customer Choice Act, but without giving effect to
amendments to the Customer Choice Act after the date hereof.

         (c) All terms defined in this Agreement have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.

         (d) The words "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Section, Annex,
Schedule and Exhibit references contained in this Agreement are references
to Sections, Annexes, Schedules and Exhibits in or to this Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".

         (e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms.

                                ARTICLE II

                 Appointment and Authorization of Servicer

         SECTION 2.01 Appointment of Servicer; Acceptance of Appointment.
Subject to Section 5.06 and Article VI, the Issuer hereby appoints
Consumers and Consumers hereby accepts such appointment, to perform the
Servicer's obligations pursuant to this Agreement on behalf of and for the
benefit of the Issuer in accordance with the terms of this Agreement. This
appointment and Consumers' acceptance thereof may not be revoked except in
accordance with the express terms of this Agreement.

<PAGE>
         SECTION 2.02 Authorization. With respect to all or any portion of
the Transferred Securitization Property, the Servicer shall be, and hereby
is, authorized and empowered by the Issuer to:

         (a) execute and deliver, on behalf of itself, the Issuer, or both,
as the case may be, any and all instruments, documents or notices, and

         (b) on behalf of itself, the Issuer, or both, as the case may be,
make any filing and participate in proceedings of any kind with any
governmental authorities, including with the MPSC.

         The Issuer shall furnish the Servicer with such documents as have
been prepared by the Servicer for execution by the Issuer, and with such
other documents as may be in the Issuer's possession, as necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder. Upon the written request of the Servicer,
the Issuer shall furnish the Servicer with any powers of attorney or other
documents necessary or appropriate to enable the Servicer to carry out its
duties hereunder.

         SECTION 2.03 Dominion and Control over Transferred Securitization
Property. Notwithstanding any other provision herein, the Servicer and the
Issuer agree that the Issuer shall have dominion and control over the
Transferred Securitization Property, and the Servicer, in accordance with
the terms hereof, is acting solely as the servicing agent of the Issuer
with respect to the Transferred Securitization Property. The Servicer
hereby agrees that it shall not take any action that is not authorized by
this Agreement, that is not consistent with its customary procedures and
practices, or that shall impair the rights of the Issuer with respect to
the Transferred Securitization Property, in each case unless such action is
required by law or court or regulatory order.

                                ARTICLE III

                              Billing Services

         SECTION 3.01 Duties of Servicer. The Servicer, as agent for the
Issuer (to the extent provided herein), shall have the following duties:

         (a) Duties of Servicer Generally. The Servicer will manage,
service, administer and effect collections in respect of the Securitization
Charges. The Servicer's duties will include:

               (i) obtaining meter reads, calculating and billing the
         Securitization Charges and collecting from Customers all
         Securitization Charge Collections;

               (ii) responding to inquiries by Customers, Alternative
         Electric Suppliers, if any, the MPSC, or any federal, local or
         other state governmental authority with respect to the
         Securitization Charges;

               (iii) delivering bills or arranging for delivery of bills,
         accounting for Securitization Charge Collections, investigating
         and resolving delinquencies, processing and depositing
         collections, making periodic remittances and furnishing periodic
         reports, to the Issuer, the Trustee, the Securitization
         Bondholders, the Securities and Exchange Commission and the Rating
         Agencies, subject, in the case of processing and depositing
         collections, making periodic remittances and furnishing periodic
         reports, to the provisions of the Intercreditor Agreement;

               (iv) settling, as the agent for the Issuer, as its interest
         may appear, defaulted or written off accounts in accordance with
         the Servicer's usual and customary practices for accounts of its
         own electric service customers; and

               (v) taking action in connection with Securitization Charge
         Adjustments as is set forth herein.
<PAGE>

         Anything to the contrary notwithstanding, the duties of the
Servicer set forth in this Agreement shall be limited in their entirety by
the provisions of the Customer Choice Act, the Financing Order and any
applicable MPSC Regulations, as in effect at the time such duties are to be
performed. Without limiting the generality of this Section 3.01(a), in
furtherance of the foregoing, the Servicer hereby agrees that it shall also
have, and shall comply with, the duties and responsibilities relating to
Securitization Charge Adjustments, data acquisition, usage and bill
calculation, billing, customer service functions, collections, payment
processing and remittance set forth in Annex 1 hereto.

         (b) Notification of Laws and Regulations. The Servicer shall
promptly notify the Issuer, the Trustee and the Rating Agencies in writing
of any laws or MPSC Regulations hereafter promulgated that have a material
adverse effect on the Servicer's ability to perform its duties under this
Agreement.

         (c) Other Information. Upon the reasonable request of the Issuer,
the Trustee or any Rating Agency, the Servicer shall provide to the Issuer,
the Trustee or the Rating Agencies, as the case may be, any public
financial information in respect of the Servicer, or any material
information regarding the Transferred Securitization Property to the extent
it is reasonably available to the Servicer, that may be reasonably
necessary and permitted by law for the Issuer, the Trustee or the Rating
Agencies to monitor the performance by the Servicer hereunder. In addition,
so long as any of the Securitization Bonds of any Series are outstanding,
the Servicer shall provide to the Issuer and to the Trustee, within a
reasonable time after written request therefor, any information available
to the Servicer or reasonably obtainable by it that is necessary to
calculate the Securitization Charges.

         (d) Alternative Electric Suppliers. The Servicer shall not permit
Alternative Electric Suppliers to bill and collect the Securitization
Charge unless it is required to do so by law.

         SECTION 3.02 Collection and Allocation of the Securitization
Charges.

         (a) The Servicer shall use all reasonable efforts, consistent with
its customary servicing procedures, to collect all amounts owed in respect
of the Securitization Charges as and when the same shall become due and
shall follow such collection procedures as it follows with respect to
collection activities that Consumers conducts for itself or others. The
Servicer shall not change the amount of or reschedule the due date of any
scheduled payment by customers of the Securitization Charges, except as
contemplated in this Agreement or as required by law or court order or MPSC
Regulations; provided, however, that the Servicer may take any of the
foregoing actions to the extent that such action would be in accordance
with customary billing and collection practices of Consumers with respect
to billing and collection activities that it conducts for itself or others.

         (b) The amount of Securitization Charge Collections during any
Billing Month of the Servicer shall be determined in accordance with the
allocation methodology set forth in Annex 2 hereto.

         (c) Consumers' other charges may include gas charges which may be
billed together with electric charges and all other charges which Consumers
may be permitted to bill and collect from customers on their utility bills.
If there is more than one Series of Securitization Bonds, the Servicer
shall allocate Securitization Charge Collections among such Series, pro
rata, based on the respective outstanding amounts payable and scheduled to
be paid with respect to such Series.
<PAGE>

         (d) The Servicer is without authority or responsibility to collect
tax charges authorized by the Financing Order, nor does the Servicer have
any control over any amounts received with respect to such tax charges.

         SECTION 3.03 Payment of Securitization Charge Collections.

         (a) On each Monthly Remittance Date, for so long as the Servicer
has satisfied the conditions of Section 5.11(b), the Servicer shall remit
to the Trustee the Securitization Charge Collections in accordance with
Section 5.11(b) (each, a "Monthly Remittance"). On each Daily Remittance
Date, for so long as the Servicer has not satisfied the conditions of
Section 5.11(b), the Servicer shall remit to the Trustee the Securitization
Charge Collections in accordance with Section 5.11(a) (each, a "Daily
Remittance").

         (b) The Servicer agrees and acknowledges that it holds all
Securitization Charge Collections collected by it for the benefit of the
Issuer and that all amounts will be remitted by the Servicer in accordance
with this Agreement without any surcharge, fee (other than the Servicing
Fee under Section 5.07 hereunder), offset, charge or other deduction and
without making any claim to reduce its obligation to remit all
Securitization Charge Collections collected by it.

         SECTION 3.04 Servicing and Maintenance Standards. The Servicer
shall, on behalf of the Issuer:

         (a) manage, service, administer and make collections in respect of
the Transferred Securitization Property with reasonable care and in
material compliance with applicable law, including all applicable MPSC
Regulations, using the same degree of care and diligence that the Servicer
exercises with respect to billing and collection activities that the
Servicer conducts for itself and others;

         (b) follow standards, policies and procedures in performing its
duties as Servicer that are customary in the electric distribution
industry;

         (c) use all reasonable efforts, consistent with its customary
servicing procedures, to enforce and maintain the Issuer's and the
Trustee's rights in respect of the Transferred Securitization Property; and

         (d) calculate the Securitization Charges in compliance with the
Customer Choice Act, the Financing Order and any applicable tariffs;

except where the failure to comply with any of the foregoing would not
materially and adversely affect the Issuer's or the Trustee's interest in
the Transferred Securitization Property. The Servicer shall follow such
customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of the Transferred Securitization Property,
which, in the Servicer's judgment, may include the taking of legal action
pursuant to Section 3.10 or otherwise. Notwithstanding the foregoing, the
Servicer shall not change its customary and usual practices and procedures
in any manner that would materially and adversely affect the Issuer's or
the Trustee's interest in the Transferred Securitization Property unless it
shall have provided the Rating Agencies with prior written notice.

         SECTION 3.05 Servicer's Certificates. The Servicer will provide to
the Issuer and to the Trustee the statements and data specified in Annex 1.
<PAGE>

         SECTION 3.06 Annual Statement as to Compliance. The Servicer
shall deliver to the Issuer, the Trustee and each Rating Agency, on or
before March 31 of each year, beginning March 31, 2002 to and including
March 31 succeeding the retiring of the Securitization Bonds, an Officers'
Certificate, stating that:

         (a) a review of the activities of the Servicer during the
preceding calendar year (or relevant portion thereof in the case of the
first such Officer's Certificate) and of its performance under this
Agreement has been made under such officers' supervision, and

         (b) to the best of such officers' knowledge, based on such review,
the Servicer has fulfilled all its obligations under this Agreement
throughout such period or, if there has been a default in the fulfillment
of any such obligation, describing each such default.

         SECTION 3.07 Annual Independent Certified Public Accountants'
Report.

         (a) The Servicer shall cause a firm of independent certified
public accountants (which may also provide other services to the Servicer
or Consumers) to prepare, and the Servicer shall deliver to the Issuer, to
the Trustee and to each Rating Agency, on or before March 31 of each year,
beginning March 31, 2002 to and including the March 31 succeeding the
retirement of all Securitization Bonds, a report addressed to the Servicer
(the "Annual Accountant's Report"), which may be included as part of the
Servicer's customary auditing activities, to the effect that such firm has
performed certain procedures in connection with the Servicer's compliance
with its obligations under this Agreement during the preceding calendar
year (or, in the case of the first Annual Accountant's Report, the period
of time from the Initial Transfer Date until December 31, 2002),
identifying the results of such procedures and including any exceptions
noted. In the event such accounting firm requires the Trustee or the Issuer
to agree or consent to the procedures performed by such firm, the Issuer
shall direct the Trustee in writing to so agree; it being understood and
agreed that the Trustee will deliver such letter of agreement or consent in
conclusive reliance upon the direction of the Issuer, and the Trustee will
not make any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or
correctness of such procedures.

         (b) The Annual Accountant's Report shall also indicate that the
accounting firm providing such report is independent of the Servicer within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants in effect from time to time.

         SECTION 3.08 Securitization Property Documentation. To assure
uniform quality in servicing the Transferred Securitization Property and to
reduce administrative costs, the Servicer shall keep on file, in accordance
with its customary procedures, all Securitization Property Documentation.

         SECTION 3.09 Computer Records; Audits of Documentation.

         (a) Safekeeping. The Servicer shall maintain accurate and complete
accounts, records and computer systems pertaining to the Transferred
Securitization Property and the Securitization Property Documentation in
accordance with its standard accounting procedures and in sufficient detail
to permit calculation of the Securitization Charge Collections to be
remitted from time to time to the Trustee pursuant to Section 3.03 and to
enable the Issuer to comply with this Agreement and the Indenture. The
Servicer shall conduct, or cause to be conducted, periodic audits of the
Securitization Property Documentation held by it under this Agreement and
of the related accounts, records and computer systems, in such a manner as
shall enable the Issuer and the Trustee, as pledgee of the Issuer, to
<PAGE>
verify the accuracy of the Servicer's record keeping. The Servicer shall
promptly report to the Issuer and to the Trustee any failure on the
Servicer's part to hold the Securitization Property Documentation and
maintain its accounts, records and computer systems as herein provided and
promptly take appropriate action to remedy any such failure. Nothing herein
shall be deemed to require an initial review or any periodic review by the
Issuer or the Trustee of the Securitization Property Documentation. The
Servicer's duties to hold the Securitization Property Documentation on
behalf of the Issuer set forth in this Section 3.09(a), to the extent such
Securitization Property Documentation has not been previously transferred
to a successor Servicer, shall terminate three years after the earlier of
the date on which (i) the Servicer is succeeded by a successor Servicer
pursuant to the provisions of this Agreement or (ii) no Securitization
Bonds of any Series are outstanding.

         (b) Maintenance of and Access to Records. The Servicer shall
maintain the Securitization Property Documentation at 212 W. Michigan
Avenue, Jackson, Michigan 49201, or at such other office as shall be
specified to the Issuer and to the Trustee by written notice not later than
30 days prior to any change in location. The Servicer shall permit the
Issuer and the Trustee or their respective duly authorized representatives,
attorneys, agents or auditors at any time during normal business hours to
inspect, audit and make copies of and abstracts from the Servicer's records
regarding the Transferred Securitization Property, the Securitization
Charges and the Securitization Property Documentation. The failure of the
Servicer to provide access to such information as a result of an obligation
or applicable law (including MPSC Regulations) prohibiting disclosure of
information regarding Customers shall not constitute a breach of this
Section 3.09(b).

         SECTION 3.10 Defending Transferred Securitization Property Against
Claims. The Servicer shall institute and maintain any action or proceeding
necessary to compel performance by the MPSC or the State of Michigan of any
of their obligations or duties under the Customer Choice Act or the
Financing Order with respect to the Transferred Securitization Property,
and the Servicer agrees to take such legal or administrative actions,
including defending against or instituting and pursuing legal actions and
appearing or testifying at hearings or similar proceedings, as may be
reasonably necessary to block or overturn any attempts to cause a repeal
of, modification of or supplement to the Customer Choice Act or the
Financing Order, as the case may be, or the rights of holders of
Transferred Securitization Property that would be adverse to Securitization
Bondholders. In any proceedings related to the exercise of the power of
eminent domain by any municipality to acquire a portion of Consumers'
electric distribution facilities, the Servicer shall assert that the court
ordering such condemnation must treat such municipality as a successor to
Consumers under the Customer Choice Act and the Financing Order. The costs
of any such action reasonably allocated by the Servicer to the Transferred
Securitization Property shall be payable from Securitization Charge
Collections as an Operating Expense in accordance with the Indenture. The
Servicer's obligations pursuant to this Section 3.10 shall survive and
continue notwithstanding the fact that the payment of Operating Expenses
pursuant to the Indenture may be delayed (it being understood that the
Servicer may be required to advance its own funds to satisfy its
obligations under this Section 3.10).

         SECTION 3.11 Opinions of Counsel. The Servicer shall deliver to
the Issuer and to the Trustee:
<PAGE>

         (a) promptly after the execution and delivery of this Agreement
and of the Sale Agreement and of each amendment hereto or thereto, and on
each Transfer Date, an Opinion of Counsel either:

                  (i) to the effect that, in the opinion of such counsel,
         all UCC filings that are necessary to perfect or maintain the
         perfection of the security interest of the Trustee in the
         Transferred Securitization Property have been executed and filed,
         and reciting the details of such filings or referring to prior
         Opinions of Counsel in which such details are given, or

                  (ii) to the effect that, in the opinion of such counsel,
         no such action is necessary to perfect or maintain the perfection
         of such security interest based on law in existence on the date of
         such Opinion of Counsel; and

         (b) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three full
calendar months after the Initial Transfer Date, an Opinion of Counsel,
dated as of a date during such 90-day period, either:

                  (i) to the effect that, in the opinion of such counsel,
         all UCC filings have been executed and filed that are necessary to
         perfect or maintain the perfection of the security interest of the
         Trustee in the Transferred Securitization Property, and reciting
         the details of such filings or referring to prior Opinions of
         Counsel in which such details are given, or

                  (ii) to the effect that, in the opinion of such counsel,
         no such action is necessary to perfect or maintain the perfection
         of such security interest based on law in existence on the date of
         such Opinion of Counsel.

Each Opinion of Counsel referred to in clause (a) or (b) above shall
specify any action necessary (as of the date of such Opinion of Counsel) to
be taken in the following year to perfect or maintain the perfection of
such security interest based on law in existence on the date of such
Opinion of Counsel.
                                ARTICLE IV

           Services Related to Securitization Charge Adjustments

         SECTION 4.01 Securitization Charge Adjustments. The Servicer shall
perform the calculations and take the actions relating to adjusting the
Securitization Charges, as set forth in Annex 1.

                                 ARTICLE V

                                The Servicer

         SECTION 5.01 Representations and Warranties of Servicer. The
Servicer makes the following representations and warranties as of each
Transfer Date, on which the Issuer has relied and will rely in acquiring
Transferred Securitization Property and in entering into this Agreement.
The representations and warranties shall survive the execution and delivery
of this Agreement, the sale of any of the Transferred Securitization
Property to the Issuer and the pledge thereof to the Trustee pursuant to
the Indenture.

         (a) Organization and Good Standing. The Servicer is a corporation
duly organized and in good standing under the laws of the state of its
incorporation, with the corporate power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is presently conducted and to execute, deliver and carry out the
terms of this Agreement, and has the power, authority and legal right to
service the Transferred Securitization Property.

         (b) Due Qualification. The Servicer has duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions, in which the
ownership or lease of property or the conduct of its business (including
the servicing of the Transferred Securitization Property as required by
this Agreement) requires such qualifications, licenses or approvals (except
where the failure to so qualify would not be reasonably likely to have a
material adverse effect on the Servicer's business, operations, assets,
revenues, properties or prospects or adversely affect the servicing of the
Transferred Securitization Property).
<PAGE>

         (c) Power and Authority. The Servicer has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms;
and the execution, delivery and performance of this Agreement have been
duly authorized by the Servicer by all necessary corporate action.

         (d) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of the Servicer enforceable against the Servicer in
accordance with its terms subject to bankruptcy, receivership, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity
(regardless of whether considered in a proceeding in equity or at law).

         (e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof will
not conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time) a default
under, the articles of incorporation or by-laws of the Servicer, or any
material indenture, material agreement or other material instrument to
which the Servicer is a party or by which it is bound; or result in the
creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument; or violate
any law or any order, rule or regulation applicable to the Servicer or its
properties of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties.

         (f) Approvals. Except for filings with the MPSC for adjusting the
Securitization Charges pursuant to Section 4.01 and Annex 1, filing of
financing statements under the Michigan UCC and the Delaware UCC and UCC
continuation filings, no approval, authorization, consent, order or other
action of, or filing with, any court, federal or state regulatory body,
administrative agency or other governmental instrumentality is required in
connection with the execution and delivery by the Servicer of this
Agreement, the performance by the Servicer of the transactions contemplated
hereby or the fulfillment by the Servicer of the terms hereof, except those
that have been obtained or made.

         (g) No Proceedings. There are no proceedings or investigations
pending or, to the Servicer's best knowledge, threatened before any court,
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or its
properties:

                  (i) seeking to prevent the issuance of the Securitization
         Bonds or the consummation of any of the transactions contemplated
         by this Agreement or any of the other Basic Documents;

                  (ii) except as disclosed in writing by the Servicer to
         the Issuer, seeking any determination or ruling that might
         materially and adversely affect the performance by the Servicer of
         its obligations under, or the validity or enforceability against
         the Servicer of, this Agreement or any of the other Basic
         Documents; or

                  (iii) relating to the Servicer and which might materially
         and adversely affect the federal or state tax attributes of the
         Securitization Bonds.

         (h) Reports and Certificates. Each report and certificate
delivered in connection with any filing made to the MPSC by the Servicer on
behalf of the Issuer with respect to the Securitization Charges or
Securitization Charge Adjustments will constitute a representation and
warranty by the Servicer that each such report or certificate, as the case
may be, is true and correct in all material respects; provided, however,
that to the extent any such report or certificate is based in part upon or
contains assumptions, forecasts or other predictions of future events, the
representation and warranty of the Servicer with respect thereto will be
limited to the representation and warranty that such assumptions, forecasts
or other predictions of future events are based upon historical
performance, current conditions and reasonable expectations.

         SECTION 5.02 Indemnities of Servicer; Release of Claims.

         (a) The Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically undertaken by the Servicer under
this Agreement.

         (b) The Servicer shall indemnify the Issuer and the Trustee (for
itself and on behalf of the Securitization Bondholders) and each of their
respective trustees, members, managers, officers, directors, employees and
<PAGE>
agents for, and defend and hold harmless each such Person from and against,
any and all Losses that may be imposed upon, incurred by or asserted
against any such Person as a result of:

                  (i) the Servicer's wilful misconduct, bad faith or gross
         negligence in the performance of its duties or observance of its
         covenants under this Agreement or the Servicer's reckless
         disregard of its obligations and duties under this Agreement;

                  (ii) the Servicer's breach of any of its representations
         or warranties in this Agreement; and

                  (iii) litigation and related expenses relating to its
         status and obligations as Servicer,

provided, however, that the Servicer shall not be liable for any Losses
resulting from the willful misconduct, bad faith or gross negligence of any
Person indemnified pursuant to this Section 5.02(b) (each, an "Indemnified
Person") or resulting from a breach of a representation or warranty made by
such Indemnified Person in any of the Basic Documents that gives rise to
the Servicer's breach.

         Promptly after receipt by an Indemnified Person of notice of its
involvement in any action, proceeding or investigation, such Indemnified
Person shall, if a claim for indemnification in respect thereof is to be
made against the Servicer under this Section 5.02(b), notify the Servicer
in writing of such involvement. Failure by an Indemnified Person to so
notify the Servicer shall relieve the Servicer from the obligation to
indemnify and hold harmless such Indemnified Person under this Section 5.02
only to the extent that the Servicer suffers actual prejudice as a result
of such failure. With respect to any action, proceeding or investigation
brought by a third party against an Indemnified Person for which
indemnification may be sought under this Section 5.02, the Servicer shall
be entitled to assume the defense of any such action, proceeding or
investigation. Upon assumption by the Servicer of the defense of any such
action, proceeding or investigation, the Indemnified Person shall have the
right to participate in such action or proceeding and to retain its own
counsel (including local counsel), and the Servicer shall bear the
reasonable fees, costs and expenses of such separate counsel. The
Indemnified Person shall not settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought under
this Section 5.02 (whether or not the Servicer is an actual or potential
party to such claim or action) unless the Servicer agrees in writing to
such settlement, compromise or consent and such settlement, compromise or
consent includes an unconditional release of the Servicer from all
liability arising out of such claim, action, suit or proceeding.

         (c) The Servicer shall indemnify the Trustee and its respective
officers, directors and agents for, and defend and hold harmless each such
Person from and against, any and all Losses that may be imposed upon,
incurred by or asserted against any such Person as a result of the
acceptance or performance of the trusts and duties contained herein and in
the Indenture, except to the extent that any such Loss is due to the wilful
misconduct, bad faith or gross negligence of the Trustee; provided,
however, that the foregoing indemnity is extended to the Trustee solely in
its individual capacity and not for the benefit of the Securitization
Bondholders or any other Person. Any such amounts payable under this
Section 5.02(c) with respect to the Trustee shall be deposited in the
General Subaccount and distributed in accordance with the Indenture.

         (d) The Servicer's indemnification obligations under Section
5.02(b) and (c) for events occurring prior to the removal or resignation of
the Trustee or the termination of this Agreement shall survive the
resignation or removal of the Trustee or the termination of this Agreement
and shall include reasonable costs, fees and expenses of investigation and
litigation (including the Issuer's and the Trustee's reasonable attorneys'
fees and expenses).

         (e) Except to the extent expressly provided for in the Basic
Documents (including the Servicer's claims with respect to the Monthly
Servicing Fees and Consumers' claim for payment of the purchase price of
the Transferred Securitization Property), the Servicer hereby releases and
discharges the Issuer (including its Member, Managers, officers, employees
and agents, if any), and the Trustee (including its respective officers,
directors and agents) (collectively, the "Released Parties") from any and
all actions, claims and demands whatsoever, which the Servicer shall or may
have against any such Person relating to the Transferred Securitization
Property or the Servicer's activities with respect thereto other than any
actions, claims and demands arising out of the willful misconduct, bad
faith or gross negligence of the Released Parties.

<PAGE>
         (f) The indemnification obligation of the Servicer under this
Section 5.02 shall be pari passu with all other general unsecured
obligations of the Servicer.

         SECTION 5.03 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person:

         (a) into which the Servicer may be merged or consolidated and
which succeeds to all or the major part of the electric distribution
business of the Servicer,

         (b) which results from the division of the Servicer into two or
more Persons and which succeeds to all or the major part of the electric
distribution business of the Servicer,

         (c) which may result from any merger or consolidation to which the
Servicer shall be a party and which succeeds to all or the major part of
the electric distribution business of the Servicer,

         (d) which may succeed to the properties and assets of the Servicer
substantially as a whole and which succeeds to all or the major part of the
electric distribution business of the Servicer, or

         (e) which may otherwise succeed to all or the major part of the
electric distribution business of the Servicer, which Person in any of the
foregoing cases (a) through (e) executes an agreement of assumption to
perform every obligation of the Servicer under this Agreement, shall be the
successor to the Servicer hereunder without the execution or filing of any
document or any further act by any of the parties to this Agreement,
provided that:

                  (i) immediately after giving effect to such transaction,
         no representation or warranty made pursuant to Section 5.01 shall
         have been breached and no Servicer Default, and no event that,
         after notice or lapse of time, or both, would become a Servicer
         Default, shall have occurred and be continuing;

                  (ii) the successor Servicer shall have delivered to the
         Issuer and the Trustee an Officers' Certificate and an Opinion of
         Counsel each stating that such consolidation, merger or succession
         and such agreement of assumption comply with this Section 5.03 and
         that all conditions precedent, if any, provided for in this
         Agreement relating to such transaction have been complied with;

                  (iii) the successor Servicer shall have delivered to the
         Issuer and to the Trustee an Opinion of Counsel either:

                  (A)      stating that, in the opinion of such counsel,
                           all filings to be made by the Servicer,
                           including UCC filings, that are necessary to
                           perfect or maintain the perfection of the
                           security interest of the Trustee in the
                           Transferred Securitization Property have been
                           executed and filed and reciting the details of
                           such filings, or
<PAGE>

                  (B)      stating that, in the opinion of such counsel, no
                           such action is necessary to perfect or maintain
                           the perfection of such security interest based
                           on law in existence on the date of such opinion;

                  (iv) the Rating Agencies shall have received prior
         written notice of such transaction (although there is no
         requirement of any Rating Agency Confirmation);

                  (v) the successor Servicer shall have delivered to the
         Issuer and the Trustee an opinion of independent tax counsel (as
         selected by, and in form and substance reasonably satisfactory to,
         the Issuer and the Trustee), which may be based on a ruling from
         the Internal Revenue Service, to the effect that, for federal
         income tax purposes, such consolidation or merger will not result
         in a material adverse federal income tax consequence to the
         Issuer, the Trustee or the then existing Securitization
         Bondholders; and

                  (vi) any applicable requirements of the Intercreditor
         Agreement have been satisfied.

The Servicer shall not consummate any transaction referred to in subclauses
(a), (b), (c), (d) or (e) above except upon execution of the above
described agreement of assumption and compliance with subclauses (i)
through (vi) above. When any Person acquires the properties and assets of
the Servicer substantially as a whole and becomes the successor to the
Servicer in accordance with the terms of this Section 5.03, then upon the
satisfaction of all of the other conditions of this Section 5.03, the
Servicer shall automatically and without further notice be released from
its obligations hereunder.

         SECTION 5.04 Assignment of Servicer's Obligations. The Servicer
may not assign its rights or obligations hereunder to any successor unless
the Rating Agency Condition and any other condition specified in the
Financing Order and the Intercreditor Agreement have been satisfied.

         SECTION 5.05 Limitation on Liability of Servicer. The Servicer
shall not be liable to the Issuer or the Trustee, except as provided under
this Agreement, for any action taken or for refraining from the taking of
any action pursuant to this Agreement or for errors in judgment; provided,
however, that this provision shall not protect the Servicer against any
liability that would otherwise be imposed by reason of willful misconduct,
bad faith or gross negligence in the performance of its duties or by reason
of reckless disregard of obligations and duties under this Agreement. The
Servicer and any director, officer, employee or agent of the Servicer may
rely in good faith on the advice of counsel reasonably acceptable to the
Trustee or on any document of any kind, prima facie properly executed and
submitted by any Person, respecting any matters arising under this
Agreement.

         Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action
that is not incidental to its duties to service the Transferred
Securitization Property in accordance with this Agreement or related to its
obligation to pay indemnification, and that in its reasonable opinion may
cause it to incur any expense or liability.

         SECTION 5.06 Consumers Not To Resign as Servicer. Subject to the
provisions of Sections 5.03 and 5.04, Consumers shall not resign from the
obligations and duties imposed on it as Servicer under this Agreement
except upon a determination that the performance of its duties under this
Agreement shall no longer be permissible under applicable law. Notice of
any such determination permitting the resignation of Consumers shall be
communicated to the Issuer, the Trustee and each Rating Agency at the
earliest practicable time (and, if such communication is not in writing,
shall be confirmed in writing at the earliest practicable time), and any
such determination shall be evidenced by an Opinion of Counsel to such
effect delivered to the Issuer and the Trustee concurrently with or
promptly after such notice. No such resignation shall become effective
<PAGE>
until a successor Servicer has assumed the servicing obligations and duties
hereunder of the Servicer in accordance with Section 6.04.

         SECTION 5.07 Monthly Servicing Fee. The Issuer agrees to pay the
Servicer the Monthly Servicing Fee with respect to all Series of
Securitization Bonds. For so long as Consumers is the Servicer, the Monthly
Servicing Fee shall be one-twelfth times 0.25% times the total Outstanding
Amount as of the date of payment of such Monthly Servicing Fee. The
foregoing Monthly Servicing Fee constitutes a fair and reasonable price for
the obligations to be performed by the Servicer.

         SECTION 5.08 Servicer Expenses. Except as otherwise expressly
provided herein, the Servicer shall be required to pay all expenses
incurred by it in connection with its activities hereunder, including fees
and disbursements of independent accountants and counsel, taxes imposed on
the Servicer and expenses incurred in connection with reports to
Securitization Bondholders.

         SECTION 5.09 Subservicing. The Servicer may at any time appoint a
subservicer to perform all or any portion of its obligations as Servicer
hereunder; provided, however, that the Rating Agency Condition shall have
been satisfied in connection therewith; and provided further that the
Servicer shall remain obligated and be liable to the Issuer, the Trustee
and the Securitization Bondholders for the servicing and administering of
the Transferred Securitization Property in accordance with the provisions
hereof without diminution of such obligation and liability by virtue of the
appointment of such subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and
administering the Transferred Securitization Property. The fees and
expenses of the subservicer shall be as agreed between the Servicer and its
subservicer from time to time, and none of the Issuer, the Trustee or the
Securitization Bondholders shall have any responsibility therefor. Any such
appointment shall not constitute a Servicer resignation under Section 5.06.

         SECTION 5.10 No Servicer Advances. The Servicer shall not make any
advances of interest on or principal of the Securitization Bonds.

         SECTION 5.11 Remittances.

         (a) The Servicer shall remit Securitization Charge Collections
(from whatever source) not later than each Daily Remittance Date, and all
proceeds of other Collateral of the Issuer, if any, received by the
Servicer during the second preceding Business Day, to the Trustee for
deposit pursuant to the Indenture. The Servicer shall promptly remit any
Indemnity Amounts paid or received by it immediately to the Trustee for
deposit pursuant to the Indenture.

         (b) Notwithstanding the foregoing clause (a), as long as:

                  (i) Consumers or any successor to Consumers' electric
         distribution business remains the Servicer, and

                  (ii) no Servicer Default has occurred and is continuing,
         and

                  (A)      Consumers or such successor obtains and
                           maintains a short-term rating of "A-1"or better
                           by Standard & Poor's, "P-1" or better by Moody's
                           and "F-1" or better by Fitch (and for five
                           Business Days following a reduction in any such
                           rating), or

<PAGE>
                  (B)      the Rating Agency Condition has been otherwise
                           satisfied (and any conditions or limitations
                           imposed by the Rating Agencies in connection
                           therewith are complied with),

         the Servicer need not make the Daily Remittances, but in lieu
         thereof, may remit all Securitization Charge Collections (from
         whatever source), and all proceeds of other Collateral of the
         Issuer, if any, received by the Servicer during the preceding
         Billing Month, (or, in the case of the first Monthly Remittance
         following a Daily Remittance, since the second Business Day
         preceding such Daily Remittance) to the Trustee for deposit
         pursuant to the Indenture, not later than the corresponding
         Monthly Remittance Date.

         (c) If the Servicer has been making Monthly Remittances but fails
to continue to satisfy the requirements of clause (b) above, the Servicer
shall begin making Daily Remittances pursuant to clause (a) above
immediately following such failure; provided, that, on the first Daily
Remittance Date following such Monthly Remittances, the Servicer shall
remit all Securitization Charge Collections (from whatever source), and all
proceeds of other Collateral of the Issuer, if any, received by the
Servicer since the last day of the preceding Billing Month, to the Trustee
for deposit pursuant to the Indenture.

         SECTION 5.12 Protection of Title. The Servicer shall execute and
file such filings and cause to be executed and filed such filings, all in
such manner and in such places as may be required by law fully to preserve,
maintain and protect the interests of the Trustee in the Transferred
Securitization Property, including all filings required under the UCC
relating to the transfer of ownership of or a security interest in the
Transferred Securitization Property by the Seller to the Issuer or the
security interest granted by the Issuer to the Trustee in the Transferred
Securitization Property. The Servicer shall deliver (or cause to be
delivered) to the Issuer and the Trustee file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.

                                ARTICLE VI

                              Servicer Default

         SECTION 6.01 Servicer Default. If any one of the following events
(a "Servicer Default") occurs and is continuing:

         (a) any failure by the Servicer to remit to the Trustee, on behalf
of the Issuer, any required remittance that continues unremedied for a
period of five Business Days after written notice of such failure is
received by the Servicer from the Issuer or the Trustee; or

         (b) any failure by the Servicer duly to observe or perform in any
material respect any other covenant or agreement of the Servicer set forth
in this Agreement, which failure:

                  (i) materially and adversely affects the Transferred
         Securitization Property or the rights of the Securitization
         Bondholders, and

                  (ii) continues unremedied for a period of 60 days after
         written notice of such failure has been given to the Servicer by
         the Issuer or by the Trustee or after discovery of such failure by
         an officer of the Servicer; or
<PAGE>

         (c) any representation or warranty made by the Servicer in this
Agreement proves to have been incorrect when made, which has a material
adverse effect on the Issuer or the Securitization Bondholders and which
material adverse effect continues unremedied for a period of 60 days after
the date on which written notice thereof has been given to the Servicer by
the Issuer or the Trustee or after discovery of such failure by an officer
of the Servicer, as the case may be; or

         (d) an Insolvency Event occurs with respect to the Servicer;

then, and in each and every case, so long as the Servicer Default shall not
have been remedied, the Trustee, with the consent of the Holders of a
majority of the outstanding principal amount of the Securitization Bonds of
all Series, but subject to the provisions of the Intercreditor Agreement,
by notice then given in writing to the Servicer (a "Termination Notice")
may terminate all the rights and obligations (other than the
indemnification obligations set forth in Section 5.02 hereof and the
obligation under Section 6.04 to continue performing its functions as
Servicer until a successor Servicer is appointed) of the Servicer under
this Agreement. In addition, upon a Servicer Default specified in Section
6.01(a) above, the Issuer and the Trustee shall be entitled to apply to the
MPSC or any court of competent jurisdiction for sequestration and payment
to the Trustee of revenues arising with respect to the Transferred
Securitization Property.

         On or after the receipt by the Servicer of a Termination Notice,
all authority and power of the Servicer under this Agreement, whether with
respect to the Transferred Securitization Property, the related
Securitization Charges or otherwise, shall, upon appointment of a successor
Servicer pursuant to Section 6.04, without further action, pass to and be
vested in such successor Servicer and, without limitation, the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
predecessor Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such Termination
Notice, whether to complete the transfer of the Securitization Property
Documentation and related documents, or otherwise. The predecessor Servicer
shall cooperate with the successor Servicer, the Trustee and the Issuer in
effecting the termination of the responsibilities and rights of the
predecessor Servicer under this Agreement, including the transfer to the
successor Servicer for administration by it of all cash amounts that shall
at the time be held by the predecessor Servicer for remittance, or shall
thereafter be received by it with respect to the Transferred Securitization
Property or the related Securitization Charges. As soon as practicable
after receipt by the Servicer of such Termination Notice, the Servicer
shall deliver the Securitization Property Documentation to the successor
Servicer. All reasonable costs and expenses (including attorneys fees and
expenses) incurred in connection with transferring the Securitization
Property Documentation to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this Section
6.01 shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs and expenses. Termination of
Consumers as Servicer shall not terminate Consumers' rights or obligations
under the Sale Agreement.

         SECTION 6.02 Notice of Servicer Default. The Servicer shall
deliver to the Issuer, the Trustee and each Rating Agency promptly after
having obtained knowledge thereof, but in no event later than five Business
Days thereafter, written notice in an Officer's Certificate of any event or
circumstance which, with the giving of notice or the passage of time, would
become a Servicer Default under Section 6.01. Such notice shall also be
given by publication in an Authorized Newspaper, so long as any
Securitization Bonds are listed on the Luxembourg Stock Exchange and the
rules of that exchange so require.

         SECTION 6.03 Waiver of Past Defaults. The Trustee, with the
consent of Holders of the majority of the outstanding principal amount of
the Securitization Bonds of all Series, may waive in writing any default by
the Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required remittances to the
Trustee of Securitization Charge Collections in accordance with Section
3.03. Upon any such waiver of a past default, such default shall cease to
exist, and any Servicer Default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent
thereto.
<PAGE>

         SECTION 6.04 Appointment of Successor.

         (a) Upon the Servicer's receipt of a Termination Notice pursuant
to Section 6.01 or the Servicer's resignation in accordance with the terms
of this Agreement, the predecessor Servicer shall continue to perform its
functions as Servicer under this Agreement and shall be entitled to receive
the requisite portion of the Monthly Servicing Fees, until a successor
Servicer has assumed in writing the obligations of the Servicer hereunder
as described below. In the event of the Servicer's removal or resignation
hereunder, the Trustee, as assignee of the Issuer, shall appoint a
successor Servicer, with the consent of the Holders of a majority of the
outstanding principal amount of the Securitization Bonds of all Series, but
subject to the provisions of the Intercreditor Agreement, and the successor
Servicer shall accept its appointment by a written assumption in form
acceptable to the Issuer and the Trustee. If, within 30 days after the
delivery of the Termination Notice, a new Servicer has not been appointed
and accepted such appointment, the Trustee may petition the MPSC or a court
of competent jurisdiction to appoint a successor Servicer under this
Agreement. A Person shall qualify as a successor Servicer only if:

                  (i) such Person is not prevented from performing the
         duties of the Servicer pursuant to the Customer Choice Act, the
         MPSC Regulations, the Financing Order and this Agreement;

                  (ii) the Rating Agency Condition has been satisfied; and

                  (iii) such Person enters into a servicing agreement with
         the Issuer having substantially the same provisions as this
         Agreement.

         (b) Upon appointment, the successor Servicer shall be the
successor in all respects to the predecessor Servicer under this Agreement
and shall be subject to all the responsibilities, duties and liabilities
arising thereafter relating thereto placed on the predecessor Servicer and
shall be entitled to the Monthly Servicing Fee and all the rights granted
to the predecessor Servicer by the terms and provisions of the Agreement.

         (c) The successor Servicer may resign only if it is prohibited
from serving as such by applicable law.

         SECTION 6.05 Cooperation with Successor. The Servicer covenants
and agrees with the Issuer that it will, on an ongoing basis, cooperate
with the successor Servicer and provide whatever information is, and take
whatever actions are, reasonably necessary to assist the successor Servicer
in performing its obligations hereunder, including, without limitation,
furnishing to the successor Servicer all information necessary to calculate
the Securitization Charge Collections.

                                ARTICLE VII

                          Miscellaneous Provisions

         SECTION 7.01 Amendment. This Agreement may be amended by the
Servicer and the Issuer, with the consent of the Trustee and the
satisfaction of the Rating Agency Condition. Promptly after the execution
of any such amendment or consent, the Issuer shall furnish written
notification of the substance of such amendment or consent to each of the
Rating Agencies.

         Prior to the execution of any amendment to this Agreement, each of
the Issuer and the Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel
referred to in Section 3.11. Each of the Issuer and the Trustee may, but
shall not be obligated to, enter into any such amendment which adversely
affects its own rights, duties or immunities under this Agreement or
otherwise.

         SECTION 7.02 Notices. Unless otherwise specifically provided
herein, all notices, directions, consents and waivers required under the
terms and provisions of this Agreement shall be in English and in writing,
and any such notice, direction, consent or waiver may be given by United
States first-class mail, reputable overnight courier service, facsimile
transmission or electronic mail (confirmed by telephone, United States
first-class mail or reputable overnight courier service in the case of
notice by facsimile transmission or electronic mail) or any other customary
means of communication, and any such notice, direction, consent or waiver
shall be effective when delivered or transmitted, or if mailed, five days
after deposit in the United States first-class mail with proper postage for
first-class mail prepaid,

         (a) in the case of the Servicer, at Consumers Energy Company, 212
W. Michigan Avenue, Jackson, Michigan 49201;

<PAGE>
         (b) in the case of the Issuer, at Consumers Funding LLC, 212 W.
Michigan Avenue, Suite M-1029, Jackson, Michigan 49201;

         (c) in the case of the Trustee, at the address provided for
notices or communications to the Trustee in the Indenture;

         (d) in the case of Moody's, at Moody's Investors Service, Inc.,
ABS Monitoring Department, 99 Church Street, New York, New York 10007;

         (e) in the case of Standard & Poor's, at Standard & Poor's Ratings
Group, 55 Water Street, New York, New York 10041, Attention: Asset Backed
Surveillance Department; and

         (f) in the case of Fitch, at Fitch, Inc., 1 State Street Plaza,
New York, New York 10004, Attention: ABS Surveillance;

or, as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.

         SECTION 7.03 Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Servicer, the Issuer and
the Trustee, on behalf of itself and the Securitization Bondholders, and
nothing in this Agreement, whether express or implied, shall be construed
to give to any other Person any legal or equitable right, remedy or claim
in any Collateral or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.

         SECTION 7.04 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.

         SECTION 7.05 Separate Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.

         SECTION 7.06 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.

         SECTION 7.07 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

         SECTION 7.08 Assignment to the Trustee. (a) The Servicer hereby
acknowledges and consents to any pledge, assignment and grant of a security
interest by the Issuer to the Trustee pursuant to the Indenture for the
benefit of the Securitization Bondholders of all right, title and interest
of the Issuer in, to and under the Transferred Securitization Property
owned by the Issuer and the proceeds thereof and the assignment of any or
all of the Issuer's rights hereunder to the Trustee.

         (b) In no event shall the Trustee have any liability for the
representations, warranties, covenants, agreements or other obligations of
the Issuer hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely
to the assets of the Issuer.
<PAGE>

         SECTION 7.09 Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement or the Indenture, the Servicer hereby
covenants and agrees that it shall not, prior to the date which is one year
and one day after the termination of the Indenture and the payment in full
of the Securitization Bonds, any other amounts owed under the Indenture,
including, without limitation, any amounts owed to third-party credit
enhancers, and any amounts owed by the Issuer under any Interest Rate Swap
Agreement, acquiesce in, petition or otherwise invoke or cause the Issuer
to invoke the process of any court or government authority for the purpose
of commencing or sustaining a case against the Issuer under any Federal or
State bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Issuer or any substantial part of the property of the
Issuer, or ordering the winding up or liquidation of the affairs of the
Issuer.

         SECTION 7.10 Termination. This Agreement shall terminate when all
Securitization Bonds have been retired, redeemed or defeased in full.


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


                                         CONSUMERS FUNDING LLC,
                                            as Issuer


                                         By:  /s/ Thomas A. McNish
                                              ----------------------------
                                              Name:  Thomas A. McNish
                                              Title: Manager


                                         CONSUMERS ENERGY COMPANY,
                                            as Servicer


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


                                         Acknowledged and Accepted:

                                         THE BANK OF NEW YORK,
                                               as Trustee


                                         By:  /s/ Cassandra D. Shedd
                                              ------------------------------
                                              Name:   Cassandra D. Shedd
                                              Title:  Assistant Vice President



<PAGE>
                                  ANNEX 1

                                     to

                            SERVICING AGREEMENT


         The Servicer agrees to comply with the following with respect to
Consumers Funding LLC (the "Issuer"):

         SECTION 1. Definitions. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in Appendix A to the
Servicing Agreement dated as of November 8, 2001, between the Issuer and
Consumers, as Servicer.

         SECTION 2. Trustee and Servicer Payment Date Statements. At least
one Business Day before each date on which distributions to the Trustee and
the Servicer are to be made pursuant to Sections 8.02(d) and (e) of the
Indenture, the Servicer shall provide the Trustee with a statement setting
forth the amounts to be distributed to each of the Trustee and Servicer
pursuant to such sections.

         SECTION 3. Payment Date Statements. At least one Business Day
before each Payment Date, the Servicer shall provide to the Issuer, the
Trustee, each Rating Agency and for so long as any Securitization Bonds are
listed on the Luxembourg Stock Exchange, any listing agent in Luxembourg
and notice that such report is available shall be published in an
Authorized Newspaper, a statement indicating:

         1.    the amount to be paid to Securitization Bondholders of each
               Series and Class in respect of principal on such Payment
               Date;

         2.    the amount to be paid to Securitization Bondholders of each
               Series and Class in respect of interest on such Payment
               Date;

         3.    the Projected Securitization Bond Balance and the
               Securitization Bond Balance for each Series and Class as of
               that Payment Date (after giving effect to the payments on
               such Payment Date);

         4.    the amount on deposit in the Overcollateralization
               Subaccount for each Series and the Scheduled
               Overcollateralization Level for each Series, as of that
               Payment Date (after giving effect to the transfers to be
               made from or into the Overcollateralization Subaccount on
               such Payment Date);

         5.    the amount on deposit in the Capital Subaccount for each
               Series as of that Payment Date (after giving effect to the
               transfers to be made from or into the Capital Subaccount on
               such Payment Date);

         6.    the amount, if any, on deposit in the Reserve Subaccount as
               of that Payment Date (after giving effect to the transfers
               to be made from or into the Reserve Subaccount on such
               Payment Date);

         7.    the amount, if any, to be paid to any Swap Counterparty (on
               a gross and a net basis, separately stated) under any
               Interest Rate Swap Agreement on or before such Payment Date;
               and

         8.    the amount of any transfers and payments to be made on such
               Payment Date pursuant to Sections 8.02(d), (e), (f), (g),
               and (i) of the Indenture.
<PAGE>

         SECTION 4. Remittance Date Statements. At least one Business Day
before each Remittance Date, but not more frequently than monthly, the
Servicer shall prepare and furnish to the Issuer and the Trustee a
statement setting forth the amount to be remitted by the Servicer to the
Trustee for deposit on such Remittance Date pursuant to the Indenture.

         SECTION 5. Securitization Charge Adjustments.

         (a) Prior to each Calculation Date, the Servicer shall calculate

                  (i) the Securitization Bond Balance as of the Payment
         Date immediately preceding the next Adjustment Date (a written
         copy of which shall be delivered by the Servicer to the Trustee
         within five days following such Calculation Date), and

                  (ii) the revised Securitization Charges with respect to
         the Transferred Securitization Property in respect of each
         Adjustment Date such that the Servicer projects that
         Securitization Charge Collections therefrom allocable to the
         Issuer will be sufficient so that:

                  (A)      the Securitization Bond Balance on the Payment
                           Date immediately preceding the next Adjustment
                           Date will equal the Projected Securitization
                           Bond Balance as of such date, taking into
                           account any amounts on deposit in the Reserve
                           Subaccount,

                  (B)      the amount on deposit in the
                           Overcollateralization Subaccount on the Payment
                           Date immediately preceding the next Adjustment
                           Date will equal the Scheduled
                           Overcollateralization Level for such date,
                           taking into account amounts on deposit in the
                           Reserve Subaccount,

                  (C)      the amount on deposit in the Capital Subaccount
                           on the Payment Date immediately preceding the
                           next Adjustment Date will equal its required
                           level for such date, taking into account any
                           amounts on deposit in the Reserve Subaccount,

                  (D)      the amount on deposit in the Reserve Subaccount
                           on the Payment Date immediately preceding the
                           next Adjustment Date will equal zero, and

                  (E)      the Securitization Charge Collections will
                           provide for (i) amortization of the remaining
                           outstanding principal amount of each Series in
                           accordance with the Expected Amortization
                           Schedule therefor, (ii) payment of interest on
                           each Series when due, payment of any amounts
                           under any Interest Rate Swap Agreement, (iii)
                           payment of all Operating Expenses of the Issuer
                           when due in accordance with the Indenture, and
                           (iv) deposits to the Overcollateralization
                           Subaccount such that the balance therein will
                           equal the Scheduled Overcollateralization Level
                           on the Payment Date immediately preceding the
                           next Adjustment Date.

<PAGE>
         (b) On or before each Calculation Date, the Servicer shall file an
Adjustment Request with the MPSC. This filing shall include the data
specified in the Financing Order.

         (c) On each Adjustment Date, the Servicer shall

                  (i) take all reasonable actions and make all reasonable
         efforts to effectuate all adjustments to the Securitization
         Charges, and

                  (ii) promptly send to the Trustee copies of all material
         notices and documents relating to such adjustments.

         (d) On each Adjustment Date, the Servicer shall provide Moody's
with a schedule indicating any changes to the Securitization Charges.

         (e) If deemed appropriate by the Servicer to protect
Securitization Bondholders and to remedy a significant and recurring
variance between actual and expected Securitization Charge Collections, the
Servicer shall make "non-routine" filings with the MPSC as authorized by
the Financing Order, for adjustments to the Securitization Charge to assure
timely payment of the periodic payment requirements of the Issuer set forth
in the Indenture. Such filings shall be made at least 90 days prior to the
proposed effective date of the proposed adjustments.

                     ANNEX 2 to the Servicing Agreement
                        Dated as of November 8, 2001

                          Consumers Energy Company
                     Securitization Calculation Process


The following three processes will be used by Consumers Energy Company, as
Servicer, under the Servicing Agreement for calculating the daily amounts
of Securitization Charges to be remitted to the Trustee for deposit in the
Collection Account not later than the Remittance Date:

         Standard Process

         Initial Start-Up Process

         Process for Securitization Charge Rate Changes Resulting from a
         True-Up Adjustment

Terms are used herein as defined in Appendix A - Master Definitions to the
Servicing Agreement. The customer billing and collections referred to in
this Annex 2 are billings to and collections from Consumers' electric and
combined electric and gas customers (but not gas only customers).

Standard Process

<PAGE>
1.       Each business day that customer billing and collections are
         processed, a file is created from the billing systems containing
         the billing data (rate class, total charges billed, Securitization
         Charges billed and KWh delivered) and a file is created with
         collection data (collection amount by rate class).

2.       Billing Data: For an entire Billing Month the total Securitization
         Charges billed by the Servicer for each rate class are divided by
         the total charges billed by Consumers and the Servicer for each
         rate class to customers for such Billing Month, creating the
         Securitization Ratio. This information will be used for the
         subsequent Billing Month's calculation process. (Monthly Ratio
         Analysis)

3.       Collection Data: Each business day after collections are received
         the total dollar amount collected by rate class is multiplied by
         the prior Billing Month's Securitization Ratio for each rate
         class. This amount is the total Securitization Charges collected,
         which will be remitted to the Trustee on a daily basis. (Daily
         Servicer's Report)

4.       Monthly Summary: At the end of each Billing Month the total of the
         daily collections for that period are summarized and reported to
         the Trustee. (Monthly Servicer's Report)

Initial Start-Up

The standard process will be modified during the first three Billing Months
following the Transfer Date of the Initial Transferred Securitization
Property under the Sale Agreement. The first such Billing Month requires
the calculation of the amount of Securitization Charges for the prior
Billing Month and collections for all three of those Billing Months must
take into account payment history by adjustment based on the Collection
Curve for the applicable Billing Month.

First Billing Month

1.       Billing Data: The amount of Securitization Charges that would have
         been billed during the Billing Month prior to actual
         securitization billing is calculated. The total Securitization
         Charges that would have been billed for each rate class are
         divided by the total charges billed by Consumers and the Servicer
         for each rate class to provide the Securitization Ratio. This will
         be done to the input files from the billing systems and then
         processed as described above. (Monthly Ratio Analysis)

2.       Collection Data: For the first of the three Billing Months, the
         daily amounts of Securitization Charges collected are adjusted to
         reflect the time lag between the customer receiving the bill and
         the Servicer receiving payment. To accomplish this, the amounts
         collected from the billing systems will be multiplied by the First
         Billing Month's Collection Curve Percentage. Standard processing
         is then performed. (Daily Servicer's Report)

<PAGE>
3.       Monthly Summary: At the end of each Billing Month the total
         Securitization Charges collected are summarized and reported to
         the Trustee. (Monthly Servicer's Report)

Months Two and Three

1        Billing Data: For the preceding Billing Month the total
         Securitization Charges for each rate class are divided by the
         total charges billed by Consumers and the Servicer for each rate
         class. This billing rate information is then used for the current
         Billing Month's calculation process. (Monthly Ratio Analysis)

2.       Collection Data: For the second and third Billing Months, the
         daily amounts of Securitization Charges collected are adjusted to
         reflect the time lag between the customer receiving the bill and
         the Servicer receiving payment. To accomplish this, the amounts
         collected from the billing systems during the Second Billing Month
         are multiplied by the cumulative First and Second Billing Months'
         Collection Curve Percentage, and the amounts collected from the
         billing systems during the Third Billing Month are multiplied by
         the cumulative First, Second and Third Billing Months' Collection
         Curve Percentage. Standard processing is then performed. (Daily
         Servicer's Report)

         In the fourth Billing Month and thereafter, standard processing is
         performed based upon 100% of the amounts billed and collected.

3.       Monthly Summary: At the end of each Billing Month the total
         Securitization Charges collected are summarized and reported to
         the Trustee. (Monthly Servicer's Report)

Securitization Charge Rate Changes Resulting from a True-Up Adjustment

The first two Billing Months after a Securitization Charge Rate change
resulting from an annual or quarterly true-up, special processing is
required to (a) reflect the fact that during the Billing Month prior to the
change the Securitization Charge was billed under the prior Securitization
Charge Rate and (b) amounts collected for the first two Billing Months
after the Securitization Charge Rate change will reflect payments for both
old and new billing amounts resulting from the prior and new Securitization
Charge Rates.

First Securitization Charge Rate-Change Billing Month

To calculate the appropriate Securitization Ratio for the first Billing
Month after the Securitization Charge Rate change:

         Collections Applicable to Prior Securitization Charge Rate

         1.    Collection Data: For the first Billing Month, the daily
               amounts of Securitization Charges collected must be adjusted
               to reflect the collections of the Securitization Charges
               billed under the prior Securitization Charge Rate. To
               accomplish this, the collection amounts from the billing
               systems are multiplied by 1 minus the first Billing Month's
               Collection Curve Percentage. Standard processing is then
               performed on these amounts using the prior Billing Month's
               Securitization Ratio. (Daily Servicer's Report)

         Collections Applicable to New Securitization Charge Rate

<PAGE>
         2.    Billing Data: For the first Billing Month, the amount of
               Securitization Charges billed is recalculated by multiplying
               the KWh delivered for each rate class by the new
               Securitization Charge Rate. The total calculated
               Securitization Charges billed for each rate class are
               divided by the total charges billed by Consumers and the
               Servicer for each rate class. This information is then used
               for the First Billing Month's second calculation process
               (point 3 below). (Monthly Ratio Analysis)

         3.    Collection Data: For the first Billing Month, the daily
               amounts of Securitization Charges collected must be adjusted
               to reflect the collections billed under the new
               Securitization Charge Rate. To accomplish this, the
               collection amounts from the billing systems are multiplied
               by the First Billing Month's Collection Curve Percentage.
               Standard processing is then performed using the recalculated
               prior month's Securitization Ratio. (Daily Servicer's
               Report)

         4.    Summarized Collection Data: For the first Billing Month, the
               Daily Servicer's Reports (points 1 and 3 above) are
               summarized into one set of reports. This summarized amount
               is the total Securitization Charges collected, which will be
               remitted to the Trustee on a daily basis. (Daily Servicer's
               Report)

Second Securitization Charge Rate Change Month

To calculate the appropriate Securitization Ratio for the second Billing
Month after the Securitization Charge Rate change:

         Collection Applicable to Prior Securitization Charge Rate

         1.    Billing Data: For the second Billing Month, the amount of
               Securitization Charges collected is recalculated by
               multiplying the KWh billed by the prior Securitization
               Charge Rate. The total calculated Securitization Charges
               billed are divided by the total charges billed by Consumers
               and the Servicer for each rate class. This information is
               then used for the second Billing Month's second calculation
               process (point 2). (Monthly Ratio Analysis)

         2.    Collection Data: For the second Billing Month, the daily
               amounts of Securitization Charges collected must be adjusted
               to reflect the collections billed under the prior
               Securitization Charge Rate applicable to each rate class. To
               accomplish this, the collection amounts from the billing
               systems are multiplied by 1 minus the cumulative First and
               Second Billing Months' Collection Curve Percentage. Standard
               processing on these amounts is then performed using the
               recalculated prior month's Securitization Ratio. (Daily
               Servicer's Report)

         Collection Applicable to New Securitization Charge Rate

<PAGE>
         3.    Collection Data: For the second Billing Month, the daily
               amounts of Securitization Charges collected must be adjusted
               to reflect the collections billed under the new
               Securitization Charge Rate. To accomplish this, the
               collection amounts from the billing systems are multiplied
               by the cumulative First and Second Billing Months'
               Collection Curve Percentage. Standard processing is then
               performed using the prior month's Securitization Ratio.
               (Daily Servicer's Report)

         4.    Summarized Collection Data: For the second Billing Month,
               the Daily Servicer's Reports (points 2 and 3 above) are
               summarized into one set of reports. This summarized amount
               is the total Securitization Charges collected, which will be
               remitted to the Trustee on a daily basis. (Daily Servicer's
               Report)


                                 APPENDIX A

                             MASTER DEFINITIONS

The definitions contained in this Appendix A are applicable to the singular
as well as the plural forms of such terms.

         Act has the meaning specified in Section 11.03(a) of the
         Indenture.

         Adjustment Date means (a) the first day of the first billing cycle
         of the Servicer in December of each year through December 2013 and
         (b) thereafter, as long as the Securitization Bonds are
         outstanding, the first day of the first billing cycle of the
         Servicer in March, June, September and December of each year,
         beginning with the billing cycle for December 2014.

         Adjustment Request means an application filed by the Servicer with
         the MPSC for a Securitization Charge Adjustment pursuant to
         Section 5 of the Issuer Annex.

         Administration Agreement means the Administration Agreement dated
         as of November 8, 2001, between Consumers, as administrator, and
         the Issuer, as the same may be amended or supplemented from time
         to time.

         Administrator means Consumers, as administrator under the
         Administration Agreement, and each successor to Consumers, in the
         same capacity, pursuant to Section 14 of the Administration
         Agreement.

         Affiliate means, with respect to any specified Person, any other
         Person controlling or controlled by or under common control with
         such specified Person. For the purposes of this definition,
         control when used with respect to any specified Person means the
         power to direct the management and policies of such Person,
         directly or indirectly, whether through the ownership of voting
         securities, by contract or otherwise; and the terms controlling
         and controlled have meanings correlative to the foregoing.
<PAGE>

         Alternative Electric Suppliers means any third party, including
         any electric generation supplier, providing billing or metering
         services, licensed by the MPSC pursuant to relevant provisions of
         the Customer Choice Act, the MPSC Regulations and the Financing
         Order.

         Annual Accountant's Report has the meaning assigned to that term
         in Section 3.07 of the Servicing Agreement.

         Authorized Denominations means, with respect to any Series or
         Class of Securitization Bonds, $1,000 and integral multiples of
         $1.00 above that amount, provided, however, that one bond of each
         Class may have denomination of less than $1,000, or such other
         denominations as may be specified in the Series Supplement
         therefor.

         Authorized Newspaper means the Luxemburger Wort or any other
         newspaper published in Luxembourg on a daily basis.

         Authorized Officer means, with respect to the Issuer, a any
         Manager and, bany person designated as an "Officer" under the
         Issuer LLC Agreement and authorized thereby to act on behalf of
         the Issuer.

         Basic Documents means the Formation Documents, the Sale Agreement,
         the Intercreditor Agreement, any Bills of Sale, the Servicing
         Agreement, the Administration Agreement, the Indenture, the
         Underwriting Agreement, the Securities Account Control Agreement
         and any Interest Rate Swap Agreement, as each may be amended or
         supplemented from time to time.

         Bill of Sale means any bill of sale issued by the Seller to the
         Issuer pursuant to the Sale Agreement evidencing the sale of
         Securitization Property by the Seller to the Issuer.

         Billing Month means the schedule for current month billings (each
         billing month includes 21 billing segments regardless of the
         number of days in the current calendar month). For uniformity of
         customer billings, each customer's meter is read every 27 to 33
         days and billed in one of the 21 monthly billing segments.

         Book-Entry Securitization Bonds means beneficial interests in the
         Securitization Bonds, ownership and transfers of which shall be
         made through book entries by a Clearing Agency as described in
         Section 2.11 of the Indenture.

         Business Day means any day other than a Saturday or Sunday or a
         day on which banking institutions in the City of Jackson,
         Michigan, or in the City of New York, New York or, with respect to
         any Securitization Bonds listed on the Luxembourg Stock Exchange,
         in Luxembourg, are required or authorized by law or executive
         order to remain closed.

         Calculation Date means the day which is a Business Day at least 45
         days before each Adjustment Date on which the Servicer files an
         Adjustment Request.
<PAGE>

         Capital Reserve Subaccount has the meaning specified in Section
         8.02(a) of the Indenture.

         Capital Subaccount has the meaning specified in Section 8.02(a) of
         the Indenture.

         Class means, with respect to any Series, any one of the classes of
         Securitization Bonds of that Series, as specified in the Series
         Supplement for that Series.

         Class Subaccount has the meaning specified in Section 8.02(a) of
         the Indenture.

         Clearing Agency means an organization registered as a "clearing
         agency" pursuant to Section 17A of the Exchange Act.

         Clearing Agency Participant means a broker, dealer, bank, other
         financial institution or other Person for whom from time to time a
         Clearing Agency effects book-entry transfers and pledges of
         securities deposited with the Clearing Agency.

         Code means the Internal Revenue Code of 1986, as amended from time
         to time, and the treasury regulations promulgated thereunder.

         Collateral has the meaning specified in the Granting Clause of the
         Indenture.

         Collection Account has the meaning specified in Section 8.02(a) of
         the Indenture.

         Collection Curve means, with respect to a Billing Month, the
         forecast prepared by the Servicer of the percentages of amounts
         billed in a Billing Month that are expected to be received during
         each of the Billing Months for which the Collection Curve
         Percentage will be applied to determine the amount of
         Securitization Charges collected.

         Collection Curve Percentage means the percentages of amounts
         billed in a particular Billing Month that are expected to be
         received during that month. The initial Collection Curve
         Percentages are:

                  First Billing Month's Collection Curve Percentage:   40.08%
                  Second Billing Month's Collection Curve Percentage:  45.09%
                  Third Billing Month's Collection Curve Percentage:   10.58%

         provided that the Collection Curve Percentages will be updated by
         Consumers periodically while the Securitization Bonds are
         outstanding using similar methodology.

         Commission means the U.S. Securities and Exchange Commission, and
         any successor thereof.

         Consumers means Consumers Energy Company, a Michigan corporation.

<PAGE>
         Corporate Trust Office means the principal office of the Trustee
         at which at any particular time its corporate trust business shall
         be administered, which office at date of the execution of this
         Indenture is located at 5 Penn Plaza-16th floor, New York, New
         York 10001-1803, Attention: Corporate Trust-Asset Backed
         Securities (ABS), or at such other address as the Trustee may
         designate from time to time by notice to the Securitization
         Bondholders and the Issuer, or the principal corporate trust
         office of any successor Trustee (the address of which the
         successor Trustee will notify the Securitization Bondholders and
         the Issuer in writing).

         Covenant Defeasance Option has the meaning specified in Section
         4.01(b) of the Indenture.

         Customers means all electric customers taking delivery of
         electricity from Consumers or its successor on its MPSC-approved
         rate schedules and special contracts.

         Customer Choice Act means the Customer Choice and Electricity
         Reliability Act as set forth in Michigan Public Acts 2000 PA 141
         and 2000 PA 142 and effective on June 5, 2000.

         Daily Remittance Date means, if the Servicer has not satisfied the
         conditions of Section 5.11(b) of the Servicing Agreement, each
         Business Day commencing on the second Business Day following the
         date on which the Servicer ceases to satisfy such conditions.

         Default means any occurrence that is, or with notice or the lapse
         of time or both would become, an Event of Default.

         Defeasance Subaccount has the meaning specified in Section 8.02(a)
         of the Indenture.

         Definitive Securitization Bonds has the meaning specified in
         Section 2.11 of the Indenture.

         Delaware UCC means the Uniform Commercial Code, as in effect in
         the State of Delaware, as amended from time to time.

         DTC Agreement means the agreement between the Issuer, the Trustee
         and The Depository Trust Company, as the initial Clearing Agency,
         dated on or about November 8, 2001, relating to the Securitization
         Bonds, as the same may be amended or supplemented from time to
         time.

         Eligible Guarantor Institution means a firm or other entity
         identified in Rule 17Ad-15 under the Exchange Act as "an eligible
         guarantor institution," including (as such terms are defined
         therein):

                  (a)      a bank;

                  (b)      a broker, dealer, municipal securities broker or
                           dealer or government securities broker or
                           dealer;

                  (c)      a credit union;

                  (d)      a national securities exchange, registered
                           securities association or clearing agency; or

<PAGE>
                  (e)      a savings association that is a participant in a
                           securities transfer association.

         Eligible Institution means:

                  (a)      the corporate trust department of the Trustee,
                           so long as any of the securities of the Trustee
                           have a credit rating from each Rating Agency in
                           one of its generic rating categories which
                           signifies investment grade, or

                  (b)      a depositary institution organized under the
                           laws of the United States of America or any
                           State (or any domestic branch of a foreign
                           bank), which

                           (i)      has either

                                    (A)     with respect to any Eligible
                                            Investment having a maturity of
                                            greater than one month, a
                                            long-term unsecured debt rating
                                            of "AA-" by Standard & Poor's
                                            and Fitch and "Aa3" by Moody's,
                                            or

                                    (B)     with respect to any Eligible
                                            Investment having a maturity
                                            one month or less, a
                                            certificate of deposit rating
                                            of "A-1+" by Standard & Poor's,
                                            "P-1" by Moody's and "F1+" by
                                            Fitch, or any other long-term,
                                            short-term or certificate of
                                            deposit rating acceptable to
                                            the Rating Agencies, and

                           (ii)     whose deposits are insured by the FDIC.

         Eligible Investments mean book-entry securities, negotiable
         instruments or securities represented by instruments in bearer or
         registered form which evidence:

                  (a)      direct obligations of, and obligations fully and
                           unconditionally guaranteed as to timely payment
                           by, the United States of America;

                  (b)      demand deposits, time deposits or certificates
                           of deposit of any depository institution or
                           trust company (any depositary institution or
                           trust company being referred to in this
                           definition as a "financial institution")
                           incorporated under the laws of the United States
                           of America or any State thereof (or any domestic
                           branch of a foreign bank) and subject to
                           supervision and examination by Federal or State
                           banking or depositary institution authorities;
                           provided, however, that at the time of the
                           investment or contractual commitment to invest
                           therein, the commercial paper or other
                           short-term unsecured debt obligations (other
                           than such obligations the rating of which is
<PAGE>
                           based on the credit of a Person other than such
                           depositary institution or trust company) thereof
                           shall have a credit rating from each of the
                           Rating Agencies in the highest investment
                           category granted thereby;

                  (c)      commercial paper or other short term obligations
                           of any corporation organized under the laws of
                           the United States of America (other than
                           Consumers) whose ratings, at the time of the
                           investment or contractual commitment to invest
                           therein, from each of the Rating Agencies are in
                           the highest investment category granted thereby;

                  (d)      investments in money market funds having a
                           rating from each of the Rating Agencies in the
                           highest investment category granted thereby
                           (including funds for which the Trustee or any of
                           its Affiliates act as investment manager or
                           advisor);

                  (e)      bankers' acceptances issued by any depositary
                           institution or trust company referred to in
                           clause (b) above;

                  (f)      repurchase obligations with respect to any
                           security that is a direct obligation of, or
                           fully guaranteed by, the United States of
                           America or any agency or instrumentality thereof
                           the obligations of which are backed by the full
                           faith and credit of the United States of
                           America, in either case entered into with a
                           depositary institution or trust company (acting
                           as principal) described in clause (b) above;

                  (g)      repurchase obligations with respect to any
                           security or whole loan entered into with

                           (i)      a financial institution (acting as
                                    principal) described in clause (b)
                                    above,

                           (ii)     a broker/dealer (acting as principal)
                                    registered as a broker or dealer under
                                    Section 15 of the Exchange Act (any
                                    broker/dealer being referred to in this
                                    definition as a "broker/dealer"), the
                                    unsecured short-term debt obligations
                                    of which are rated P-1 by Moody's, A-1+
                                    by Standard & Poor's and F1+ by Fitch
                                    at the time of entering into this
                                    repurchase obligation, or

                           (iii)    an unrated broker/dealer, acting as
                                    principal, that is a wholly-owned
                                    subsidiary of a non-bank or bank
                                    holding company the unsecured
                                    short-term debt obligations of which
                                    are rated P-1 by Moody's, A-1+ by
                                    Standard & Poor's and F1+ by Fitch at
                                    the time of purchase; or
<PAGE>

                  (h)      any other investment permitted by each Rating Agency;

         provided, however, that, with respect to Moody's only, the obligor
         related to clauses (b), (c), (e), (f) and (g) above must have both
         a long term rating of at least A1 and a short term rating of at
         least P-1, and provided further, that, unless otherwise permitted
         by each Rating Agency, upon the failure of any Eligible
         Institution to maintain any applicable rating set forth in this
         definition or the definition of Eligible Institution, the related
         investments at such institution shall be reinvested in Eligible
         Investments at a successor Eligible Institution within 10 days,
         and provided, further, that, any Eligible Investment must not:

                  (a)      be sold, liquidated or otherwise disposed of at
                           a loss, prior to the maturity thereof, or

                  (b)      mature later than (i) the date on which the
                           proceeds of such Eligible Investment will be
                           required to be on deposit in the Collection
                           Account in order for the Trustee to make all
                           required and scheduled payments and deposits
                           into Subaccounts under the Indenture, if such
                           Eligible Investment is held by an Affiliate of
                           the Trustee, or (ii) the Business Day prior to
                           the date on which the proceeds of such Eligible
                           Investment will be required to be on deposit in
                           the Collection Account in order for the Trustee
                           to make all required and scheduled payments and
                           deposits into Subaccounts under the Indenture,
                           if such Eligible Investment is not held by an
                           Affiliate of the Trustee; provided, however that
                           with respect to the period prior to the first
                           Payment Date any Eligible Investment must not
                           have a maturity of greater than six months.

         Eligible Securities Account means either:

                  (a)      a segregated trust account with an Eligible
                           Institution or

                  (b)      a segregated trust account with the corporate
                           trust department of a depositary institution
                           organized under the laws of the United States of
                           America or any State (or any domestic branch of
                           a foreign bank), having corporate trust powers
                           and acting as trustee for funds deposited in
                           such account, so long as any of the securities
                           of such depositary institution shall have a
                           credit rating from each Rating Agency in one of
                           its generic rating categories which signifies
                           investment grade.

         Event of Default has the meaning specified in Section 5.01 of the
         Indenture.

        Exchange Act means the Securities Exchange Act of 1934, as
         amended.

         Expected Amortization Schedule means, with respect to each Series
         or, if applicable, each Class of Securitization Bonds, the
         expected amortization schedule for principal thereof, as specified
         in the Series Supplement therefor.

         Expected Final Payment Date means, with respect to each Series or,
         if applicable, each Class of Securitization Bonds, the date when
         all interest and principal is scheduled to be paid with respect to
         that Series or Class in accordance with the Expected Amortization
         Schedule, as specified in the Series Supplement therefor.

         Filing Office means the Office of the of the Secretary of State of
         the State of Michigan or the Office of the Secretary of State of
         the State of Delaware, as applicable.

         Final Maturity Date means, for each Series or, if applicable, each
         Class of Securitization Bonds, the date by which all principal of
         and interest on such Series or Class of Securitization Bonds is
         required to be paid, as specified in the Series Supplement
         therefor.

         Financing Issuance means an issuance of a new Series of
         Securitization Bonds under the Indenture to provide funds to
         finance the purchase by the Issuer of Securitization Property.

         Financing Order means the Opinion and Order issued on October 24,
         2000 and the Order Granting Rehearing issued on January 12, 2001
         by the MPSC (MPSC Docket Number U-12505) with respect to
         Consumers.

         Fitch means Fitch, Inc., or its successor.

         Formation Documents means, collectively, the Issuer LLC Agreement,
         the Issuer Certificate of Formation and any other document
         pursuant to which the Issuer is formed or governed, as each may be
         amended or supplemented from time to time.

         General Subaccount has the meaning specified in Section 8.02(a) of
         the Indenture.

         Grant means mortgage, pledge, bargain, sell, warrant, alienate,
         remise, release, convey, assign, transfer, create, and grant a
         lien upon and a security interest in and right of set-off against,
         deposit, set over and confirm. A Grant of the Collateral or of any
         other agreement or instrument shall include all rights, powers and
         options (but none of the obligations) of the Granting party
         thereunder, including the immediate and continuing right to claim
         for, collect, receive and give receipt for principal, interest and
         other payments in respect of the Collateral and all other moneys
         payable thereunder, to give and receive notices and other
         communications, to make waivers or other agreements, to exercise
         all rights and options, to bring Proceedings in the name of the
         Granting party or otherwise and generally to do and receive
         anything that the Granting party is or may be entitled to do or
         receive thereunder or with respect thereto.

         Holder or Securitization Bondholder means the Person in whose name
         a Securitization Bond of any Series or Class is registered in the
         Securitization Bond Register.
<PAGE>

         Indemnified Person has the meaning specified in Section 5.02 of
         the Servicing Agreement.

         Indemnity Amount means the amount of any indemnification
         obligation payable under the Basic Documents.

         Indenture means the Indenture dated as of November 8, 2001,
         between the Issuer and the Trustee, as the same may be amended and
         supplemented from time to time by one or more Supplemental
         Indentures, and shall include each Series Supplement and the forms
         and terms of the Securitization Bonds established thereunder.

         Independent means, when used with respect to any specified Person,
         that the Person

                  (a)      is in fact independent of the Issuer, any other
                           obligor upon the Securitization Bonds,
                           Consumers, the Servicer (if different from
                           Consumers) and any Affiliate of any of the
                           foregoing Persons,

                  (b)      does not have any direct financial interest or
                           any material indirect financial interest in the
                           Issuer, any such other obligor, Consumers or any
                           Affiliate of any of the foregoing Persons, and

                  (c)      is not connected with the Issuer, any such other
                           obligor, Consumers or any Affiliate of any of
                           the foregoing Persons as an officer, employee,
                           promoter, underwriter, trustee, partner,
                           director or person performing similar functions.

         Independent Certificate means a certificate or opinion to be
         delivered to the Trustee under the circumstances described in, and
         otherwise complying with, the applicable requirements of Section
         11.01 of the Indenture, made by an Independent appraiser or other
         expert appointed by an Issuer Order and approved by the Trustee in
         the exercise of reasonable care, and such opinion or certificate
         shall state that the signer has read the definition of
         "Independent" in this Appendix A and that the signer is
         Independent within the meaning thereof.

         Independent Manager has the meaning set forth in the Issuer LLC
         Agreement.

         Initial Purchase Price has the meaning set forth in Section
         2.01(a) of the Sale Agreement.

         Initial Transfer Date means the Series Issuance Date for the first
         Series of Securitization Bonds.

         Initial Transferred Securitization Property means the
         Securitization Property sold, assigned and/or transferred by the
         Seller to the Issuer as of the Initial Transfer Date pursuant to
         the Sale Agreement and the Bill of Sale delivered on or prior to
         the Initial Transfer Date as identified in such Bill of Sale.
<PAGE>

         Insolvency Event means, with respect to a specified Person,

                  (a)      the filing of a decree or order for relief by a
                           court having jurisdiction in the premises in
                           respect of such Person or any substantial part
                           of its property in an involuntary case under any
                           applicable Federal or State bankruptcy,
                           insolvency or other similar law now or hereafter
                           in effect, or appointing a receiver, liquidator,
                           assignee, custodian, trustee, sequestrator or
                           similar official for such Person or for any
                           substantial part of its property, or ordering
                           the winding-up or liquidation of such Person's
                           affairs, and such decree or order shall remain
                           unstayed and in effect for a period of 90
                           consecutive days or

                  (b)      the commencement by such Person of a voluntary
                           case under any applicable Federal or State
                           bankruptcy, insolvency or other similar law now
                           or hereafter in effect, or the consent by such
                           Person to the entry of an order for relief in an
                           involuntary case under any such law, or the
                           consent by such Person to the appointment of or
                           taking possession by a receiver, liquidator,
                           assignee, custodian, trustee, sequestrator or
                           similar official for such Person or for any
                           substantial part of its property, or the making
                           by such Person of any general assignment for the
                           benefit of creditors, or the failure by such
                           Person generally to pay its debts as such debts
                           become due, or the taking of action by such
                           Person in furtherance of any of the foregoing.

         Intercreditor Agreement means: (i) the Intercreditor Agreement
         dated as of November 8, 2001 (the "Initial Intercreditor
         Agreement"), among Consumers, the Trustee, the Issuer, Canadian
         Imperial Bank of Commerce and Asset Securitization Cooperative
         Corporation, as amended and supplemented from time to time; or
         (ii) any subsequent intercreditor agreement entered into by the
         Trustee pursuant to Section 18(b) of the Initial Intercreditor
         Agreement.

         Interest means, for any Payment Date for any Series or Class of
         Securitization Bonds, the sum, without duplication, of:

                  (a)      an amount equal to the amount of interest
                           accrued at the applicable Interest Rate from the
                           prior Payment Date with respect to that Series
                           or Class;

                  (b)      any unpaid interest, plus any interest accrued
                           on this unpaid interest at the applicable
                           Interest Rate, to the extent permitted by
                           applicable law;

                  (c)      if the Securitization Bonds have been declared
                           due and payable, all accrued and unpaid interest
                           thereon; and

                  (d)      with respect to a Series or Class to be redeemed
                           prior to the next Payment Date, the amount of
                           interest that will be payable as interest on
                           such Series or Class upon such redemption.

        Interest Rate means, with respect to each Series or Class of
         Securitization Bonds, the rate at which interest accrues on the
         principal balance of Securitization Bonds of such Series or Class,
         as specified in the Series Supplement therefor.

         Interest Rate Swap Agreement means any interest rate swap
         agreement entered into by the Issuer with respect to any Series or
         Class of Securitization Bonds, including, without limitation, the
         ISDA Master Agreement and the related Schedule and Confirmation
         between the Issuer and a Swap Counterparty, as same may be amended
         or supplemented from time to time.

         Issuer means Consumers Funding LLC, a Delaware limited liability
         company, or its successor under the Indenture or the party named
         as such in the Indenture until a successor replaces it and,
         thereafter, means the successor.

         Issuer Annex means Annex 1 of the Servicing Agreement.

         Issuer Certificate of Formation means the Amended and Restated
         Certificate of Formation of the Issuer which was filed with the
         Delaware Secretary of State's Office on November 6, 2001, as the
         same may be amended or supplemented from time to time.

         Issuer LLC Agreement means the Amended and Restated Limited
         Liability Company Agreement between the Issuer and Consumers, as
         sole Member, dated as of November 8, 2001, as the same may be
         amended or supplemented from time to time.

         Issuer Officer's Certificate means a certificate signed by any
         Authorized Officer of the Issuer, under the circumstances
         described in, and otherwise complying with, the applicable
         requirements of Section 11.01 of the Indenture, and delivered to
         the Trustee. Unless otherwise specified, any reference in the
         Indenture to an Officer's Certificate shall be to an Officer's
         Certificate of any Authorized Officer of the Issuer.

         Issuer Opinion of Counsel means one or more written opinions of
         counsel who may, except as otherwise expressly provided in the
         Indenture, be employees of or counsel to the Issuer or the Seller
         and who shall be reasonably satisfactory to the Trustee, and which
         opinion or opinions shall be addressed to the Trustee, and shall
         be in a form reasonably satisfactory to the Trustee.

         Issuer Order or Issuer Request means a written order or request,
         respectively, signed in the name of the Issuer by any one of its
         Authorized Officers and delivered to the Trustee.

         Legal Defeasance Option has the meaning specified in Section
         4.01(b) of the Indenture.

         Lien means a security interest, lien, charge, pledge, equity or
         encumbrance of any kind.

<PAGE>
         Losses means collectively, any and all liabilities, obligations,
         losses, damages, payments, costs or expenses of any kind
         whatsoever.

         Manager has the meaning set forth in the Issuer LLC Agreement.

         Member means Consumers, as the sole member of the Issuer, in its
         capacity as such member under the Issuer LLC Agreement.

         Michigan UCC means the Uniform Commercial Code, as in effect in
         the State of Michigan, as amended from time to time.

         Monthly Remittance Date means the 19th day of each calendar month
         (or if such day is not a Business Day, the preceding Business
         Day).

         Monthly Servicing Fee means the fee payable to the Servicer on a
         monthly basis for services rendered, in accordance with Section
         5.07 of the Servicing Agreement.

         Moody's means Moody's Investors Service, Inc., or its successor.

         MPSC means the Michigan Public Service Commission or its
         successor.

         MPSC Regulations means any regulations, orders, guidelines or
         directives promulgated, issued or adopted by the MPSC, as in
         effect from time to time.

         Officers' Certificate means, with respect to a corporation, a
         certificate signed by the chairman of the board, the president,
         the vice chairman of the board, any executive vice president, any
         vice president, the treasurer or the secretary of such company,
         and with respect to a limited liability company, any Manager.

         Operating Expenses means, with respect to the Issuer, all fees,
         costs, expenses and indemnity payments owed by the Issuer,
         including, without limitation, all amounts owed by the Issuer to
         the Trustee, the Monthly Servicing Fee, the fees and expenses
         payable by the Issuer to the Administrator under the
         Administration Agreement, the fees and expenses payable by the
         Issuer to the Independent Managers and Special Members of the
         Issuer, fees of the Rating Agencies, legal fees and expenses of
         the Servicer pursuant to Section 3.10 of the Servicing Agreement,
         legal and accounting fees, costs and expenses of the Issuer and
         legal, accounting or other fees, costs and expenses of the Seller
         (including, without limitation, any costs and expenses incurred by
         the Seller pursuant to Section 4.09 of the Sale Agreement) under
         or in connection with the Basic Documents or the Financing Order.

         Opinion of Counsel means one or more written opinions of counsel
         who may be an employee of or counsel to Consumers, the Issuer or
         any other Person (as the context may require), which counsel shall
         be reasonably acceptable to the Trustee, the Issuer or the Rating
         Agencies, as applicable, and which shall be in form reasonably
         satisfactory to the Trustee, if applicable.

         Outstanding with respect to Securitization Bonds means, as of the
         date of determination, all Securitization Bonds theretofore
         authenticated and delivered under the Indenture except:

<PAGE>
                  (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.

<PAGE>
         Payment Date means, with respect to each Series or Class of
         Securitization Bonds, each date or dates respectively specified as
         Payment Dates for such Series or Class in the Series Supplement
         therefor.

         Person means any individual, corporation, estate, partnership,
         joint venture, association, joint stock company, trust (including
         any beneficiary thereof), business trust, limited liability
         company, unincorporated organization or government or any agency
         or political subdivision thereof.

         Predecessor Securitization Bond means, with respect to any
         particular Securitization Bond, every previous Securitization Bond
         evidencing all or a portion of the same debt as that evidenced by
         such particular Securitization Bond; and, for the purpose of this
         definition, any Securitization Bond authenticated and delivered
         under Section 2.06 of the Indenture in lieu of a mutilated, lost,
         destroyed or stolen Securitization Bond shall be deemed to
         evidence the same debt as the mutilated, lost, destroyed or stolen
         Securitization Bond.

         Principal means, with respect to any Payment Date and each Series
         or Class of Securitization Bonds:

                  (a)      the amount of principal scheduled to be paid on
                           such Payment Date in accordance with the
                           Expected Amortization Schedule;

                  (b)      the amount of principal due on the Final
                           Maturity Date of any Series or Class if such
                           Payment Date is the Final Maturity Date;

                  (c)      the amount of principal due as a result of the
                           occurrence and continuance of an Event of
                           Default and acceleration of the Securitization
                           Bonds;

                  (d)      the amount of principal and premium, if any, due
                           as a result of a redemption of Securitization
                           Bonds on such Payment Date; and

                  (e)      any overdue payments of principal.

         Pro Rata has the meaning set forth in Section 8.02(l) of the
         Indenture.

         Proceeding means any suit in equity, action at law or other
         judicial or administrative proceeding.

         Projected Securitization Bond Balance means, as of any date, the
         sum of the amounts provided for in the Expected Amortization
         Schedules for each Outstanding Series of Securitization Bonds as
         of such date.

<PAGE>
         Rating Agency means, as of any date, any rating agency rating the
         Securitization Bonds of any Class or Series at the time of
         issuance thereof at the request of the Issuer. If no such
         organization or successor is any longer in existence, "Rating
         Agency" shall be a nationally recognized statistical rating
         organization or other comparable Person designated by the Issuer,
         notice of which designation shall be given to the Trustee, the
         Member and the Servicer.

         Rating Agency Condition means, with respect to any action, the
         notification by the Trustee to each Rating Agency of such action
         and the notification from each of Fitch and S&P to the Trustee and
         the Issuer that such action will not result in a reduction or
         withdrawal of the then current rating by such Rating Agency of any
         Outstanding Series or Class of Securitization Bonds.

         Record Date has the meaning set forth in each Supplemental
         Indenture.

         Redemption Date means, with respect to each Series or Class of
         Securitization Bonds, the date for the redemption of the
         Securitization Bonds of such Series or Class pursuant to Sections
         10.01 or 10.02 of the Indenture or the Series Supplement for such
         Series or Class, which in each case shall be a Payment Date.

         Redemption Price has the meaning set forth in Section 10.01 of the
         Indenture.

         Refunding Issuance means an issuance of a new Series of
         Securitization Bonds under the Indenture to pay the cost of
         refunding, through redemption or payment on the Expected Final
         Payment Date for a Series or Class of Securitization Bonds, all or
         part of the Securitization Bonds of such Series or Class to the
         extent permitted by the terms thereof.

         Released Parties has the meaning specified in Section 5.02(e) of
         the Servicing Agreement.

         Remittance Date means a Daily Remittance Date or a Monthly
         Remittance Date, as applicable.

         Required Capital Amount means with respect to any Series, the
         amount required to be deposited in the Capital Subaccount on the
         Series Issuance Date of such Series, as specified in the related
         Series Supplement.

         Reserve Subaccount has the meaning specified in Section 8.02(a) of
         the Indenture.

         Responsible Officer means, with respect to the Trustee, any
         officer assigned to the Corporate Trust Division (or any successor
         thereto), including any vice president, assistant vice president,
         trust officer, secretary, assistant secretary, or any other
         officer of the Trustee customarily performing functions similar to
         those performed by any of the above designated officers, in each
         case having direct responsibility for the administration of the
         Indenture.

         Retiring Trustee has the meaning specified in Section 6.08(b) of
         the Indenture.

         Sale Agreement means the Sale Agreement dated November 8, 2001
         between the Seller and the Issuer, as the same may be amended or
         supplemented from time to time.

<PAGE>
         Scheduled Overcollateralization Level means, with respect to each
         Series and any Payment Date, the amount with respect to such
         Series set forth as such in Schedule B of the Series Supplement.

         Secured Obligations has the meaning set forth in the Granting
         Clause of the Indenture.

         Securities Account Control Agreement means the securities account
         control agreement dated as of November 8, 2001, by and between
         Consumers Funding LLC, as debtor, the Trustee as the secured party
         and The Bank of New York, in its capacity as securities
         intermediary thereunder.

         Securitization Bond means any of the Securitization Bonds (as
         defined in the Customer Choice Act) issued by the Issuer pursuant
         to the Indenture.

         Securitization Bond Balance means, as of any date, the aggregate
         Outstanding Amount of all Series of Securitization Bonds on such
         date.

         Securitization Bond Register has the meaning specified in Section
         2.05(a) of the Indenture.

         Securitization Bond Registrar has the meaning specified in Section
         2.05(a) of the Indenture.

         Securitization Charge means the nonbypassable amounts to be
         charged for the use or availability of electric services (but does
         not include tax charges authorized by the Financing Order),
         approved by the MPSC under the Financing Order, to fully recover
         qualified costs, to be collected by Consumers, its successors,
         assignees or other collection agents, as provided for in the
         Financing Order.

         Securitization Charge Adjustment means each adjustment to the
         Securitization Charge related to the Transferred Securitization
         Property made in accordance with Section 4.01 of the Servicing
         Agreement, the Issuer Annex and the Financing Order.

         Securitization Charge Rate means the amount of the surcharge
         applied to all kilowatt-hours (KWh) billed to determine the amount
         of the Securitization Charges.

         Securitization Charge Collections means amounts received by the
         Servicer in respect of the Securitization Charge as determined by
         the Servicer in accordance with the allocation methodology set
         forth in Annex 2 to the Servicing Agreement.

         Securitization Property has the meaning assigned to that term in
         the Customer Choice Act and as approved with respect to Consumers
         in the Financing Order.
<PAGE>

         Securitization Property Documentation means all documents relating
         to the Transferred Securitization Property, including copies of
         the Financing Order and all documents filed with the MPSC in
         connection with any Securitization Charge Adjustment.

         Securitization Ratio means for an entire Billing Month the total
         Securitization Charges billed by the Servicer for each rate class
         divided by the total charges billed by Consumers and the Servicer
         for each rate class to customers for such Billing Month. Customers
         for this purpose refers to Consumers' electric and combination
         electric and gas customers (and not gas only customers).

         Seller means Consumers, in its capacity as seller of the
         Securitization Property to the Issuer pursuant to the Sale
         Agreement.

         Series means any series of Securitization Bonds issued by the
         Issuer and authenticated by the Trustee pursuant to the Indenture,
         as specified in the Series Supplement therefor.

         Series Capital Subaccount has the meaning specified in Section
         8.02(a) of the Indenture.

         Series Issuance Date means, with respect to any Series, the date
         on which the Securitization Bonds of such Series are to be
         originally issued in accordance with Section 2.10 of the Indenture
         and the Series Supplement for such Series.

         Series Overcollateralization Subaccount has the meaning specified
         in Section 8.02(a) of the Indenture.

         Series Subaccount has the meaning specified in Section 8.02(a) of
         the Indenture.

         Series Supplement means an indenture supplemental to the Indenture
         that authorizes a particular Series of Securitization Bonds, as
         the same may be amended or supplemented from time to time.

         Servicer means Consumers, as the servicer of the Securitization
         Property, and each successor to Consumers (in the same capacity)
         pursuant to Section 5.03, 5.04 or 6.04 of the Servicing Agreement.

         Servicer Default means an event specified in Section 6.01 of the
         Servicing Agreement.

         Servicing Agreement means the Servicing Agreement dated as of
         November 8, 2001 between the Issuer and the Servicer, as the same
         may be amended and supplemented from time to time.

         Special Member has the meaning set forth in the Issuer LLC
         Agreement.

         Standard & Poor's, or S&P, means Standard & Poor's Ratings Group,
         a division of The McGraw-Hill Companies, or its successor.

         State means any one of the 50 states of the United States of
         America or the District of Columbia.

         Subaccount means any of the subaccounts of the Collection Account
         specified in Section 8.02 of the Indenture.

<PAGE>
         Subsequent Sale means the sale of additional Securitization
         Property by the Seller to the Issuer after the Initial Transfer
         Date, subject to the satisfaction of the conditions specified in
         the Sale Agreement and the Indenture.

         Subsequent Transfer Date means the date that a sale of Subsequent
         Transferred Securitization Property will be effective, as
         specified in a written notice provided by the Seller to the Issuer
         pursuant to the Sale Agreement.

         Subsequent Transferred Securitization Property means
         Securitization Property sold by the Seller to the Issuer as of a
         Subsequent Transfer Date pursuant to the Sale Agreement and the
         Bill of Sale delivered on or prior to the Subsequent Transfer Date
         as identified in such Bill of Sale.

         Successor Servicer has the meaning specified in Section 3.19(i) of
         the Indenture.

         Supplemental Indenture means a supplemental indenture entered into
         by the Issuer and the Trustee pursuant to Article IX of the
         Indenture.

         Swap Counterparty means, with respect to any Interest Rate Swap
         Agreement, the swap counterparty under that Interest Rate Swap
         Agreement.

         Termination Notice has the meaning specified in Section 6.01(d) of
         the Servicing Agreement.

         Transfer Date means the Initial Transfer Date or any Subsequent
         Transfer Date, as applicable.

         Transferred Securitization Property means Securitization Property
         which has been sold, assigned and/or transferred to the Issuer
         pursuant to the Sale Agreement and the Bill of Sale.

         Trust Indenture Act or TIA means the Trust Indenture Act of 1939,
         as in force on the date hereof, unless otherwise specifically
         provided.

         Trustee means The Bank of New York, a New York banking
         corporation, or its successor, as trustee under the Indenture, or
         any successor Trustee under the Indenture.

         UCC means the Uniform Commercial Code, as in effect in the
         relevant jurisdiction, as amended from time to time.

         Underwriting Agreement means the Underwriting Agreement dated as
         of October 31, 2001 among the Seller, the Issuer and Morgan
         Stanley & Co. Incorporated, on behalf of itself and as the
         representative of the several underwriters named therein.

         U.S. Government Obligations means direct obligations (or
         certificates representing an ownership interest in such
         obligations) of the United States of America (including any agency
         or instrumentality thereof) for the payment of which the full
         faith and credit of the United States of America is pledged and
         which are not callable at the issuer's option.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.C
<SEQUENCE>12
<FILENAME>k65350ex10-c.txt
<DESCRIPTION>INTERCREDITOR AGREEMENT DATED NOVEMBER 8, 2001
<TEXT>
<PAGE>



                                                              EXHIBIT 10(c)



                          INTERCREDITOR AGREEMENT

                  INTERCREDITOR AGREEMENT dated as of November 8, 2001
among CANADIAN IMPERIAL BANK OF COMMERCE, a banking institution chartered
under the Bank Act of Canada with an office at 425 Lexington Avenue, New
York, New York ("CIBC" and as Servicing Agent under the RPA's referred to
below, the "Servicing Agent"), ASSET SECURITIZATION COOPERATIVE
CORPORATION, a California cooperative corporation with an office at 425
Lexington Avenue, New York, New York ("ASCC"), THE BANK OF NEW YORK, a New
York banking corporation, with an office at 5 Penn Plaza, 16th Floor, New
York, New York 10001 (as Trustee under the Indenture referred to below, the
"Bond Trustee"), CONSUMERS FUNDING LLC, a Delaware limited liability
company with an office at 212 W. Michigan Avenue, Jackson, Michigan (the
"Bond Issuer"), and CONSUMERS ENERGY COMPANY, a Michigan corporation with
an office at 212 W. Michigan Avenue, Jackson, Michigan ("Consumers").

                  WHEREAS, pursuant to (i) the Receivables Sale Agreement,
dated as of December 20, 1996, as amended, restated, supplemented or
otherwise modified from time to time, between Consumers, as Seller and as
Collection Agent, and CIBC, as Purchaser and as Servicing Agent, and (ii)
the Receivables Sale Agreement, dated as of December 20, 1996, as amended,
restated, supplemented or otherwise modified from time to time, among
Consumers, as Seller and as Collection Agent, ASCC, as Purchaser, and CIBC,
as Servicing Agent (collectively, the "RPA's"), Consumers has sold and may
hereafter sell interests in its Receivables (as defined in the RPA's) to
CIBC, ASCC and/or other persons that may from time to time become parties
to one or both of the RPA's as purchasers (collectively, the "Purchasers");
and

                  WHEREAS, pursuant to the Sale Agreement, dated as of
November 8, 2001, between Consumers and the Bond Issuer (the "Sale
Agreement"), Consumers has sold all of its Securitization Property (which
includes the Securitization Charge) to the Bond Issuer, and pursuant to the
Servicing Agreement, dated as of November 8, 2001, between Consumers and
the Bond Issuer (the "Servicing Agreement"), Consumers has agreed to
service the Securitization Property on behalf of the Bond Issuer; and

                  WHEREAS, pursuant to the terms of the Indenture dated as
of November 8, 2001 between the Bond Issuer and the Bond Trustee, as
supplemented by one or more Series Supplements (collectively, the
"Indenture"), the Bond Issuer, among other things, has granted to the Bond
Trustee a security interest in the Securitization Property and certain of
its other assets to secure the Secured Obligations, which include, among
other things, the Securitization Bonds issued pursuant to the Indenture
(the "Securitization Bonds"); and

                  WHEREAS, pursuant to the Servicing Agreement, Consumers'
obligations as the servicer under the Servicing Agreement on behalf of the
Bond Issuer (the "Bond Servicer") include the collection of the
Securitization Charge; and

                  WHEREAS, pursuant to the RPA's, Consumers as Collection
Agent on behalf of the Purchasers has agreed to provide servicing functions
with respect to Collections of the Receivables; and

                  WHEREAS, Collections with respect to Receivables and
Securitization Charge Collections and related bank accounts in which the
same may be deposited are the subject of the RPA's, the Sale Agreement, the
Indenture and the Servicing Agreement; and

                  WHEREAS, the parties hereto wish to agree upon their
respective rights relating to such Collections, Securitization Charge
Collections and bank accounts, as well as other matters of common interest
to them under the RPA's, the Sale Agreement, the Indenture and the
Servicing Agreement; and
<PAGE>

                  WHEREAS, defined terms used but not otherwise defined
herein have the meaning set forth in the RPA's or in Annex A to the Sale
Agreement, the Indenture and the Servicing Agreement;

                      NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, the parties hereto agree as follows:

                  1. The Purchasers hereby acknowledge the ownership
interest of the Bond Issuer in the Transferred Securitization Property
including revenues, collections, payments, money and proceeds arising
therefrom (the "Bond Issuer Assets") and the security interest in favor of
the Bond Trustee in such assets (the "Bond Trustee Collateral"). The Bond
Trustee and the Bond Issuer hereby acknowledge the ownership interest of
the Purchasers in the Receivables. The Purchasers further acknowledge that,
notwithstanding anything in the RPA's to the contrary, none of them has any
interest in the Bond Issuer Assets or the Bond Trustee Collateral, and each
of the Bond Trustee and the Bond Issuer further acknowledges that,
notwithstanding anything in the Sale Agreement or the Indenture to the
contrary, it has no interest in the Receivables. Each of the parties hereto
agrees that the determination of the assets that constitute Securitization
Charge Collections in respect of the Transferred Securitization Property
shall be made in accordance with the allocation methodology set forth in
Annex 2 to the Servicing Agreement. It is understood and agreed that such
Annex 2 will not be amended or modified without the prior written consent
of each of the parties hereto.

                  2. (a) The Purchasers, the Bond Issuer and the Bond
Trustee acknowledge that Collections with respect to Receivables and
Securitization Charge Collections will be deposited into either

         (i) account no. 10132-33 at Bank One, Detroit, Michigan, ABA
         #072000326, or

         (ii) account no. 4825285820 at Standard Federal Bank, Troy,
         Michigan, ABA #072000805

(each, together with any additional or replacement account agreed to in
writing by the Servicing Agent and the Bond Trustee subject to the Rating
Agency Condition (as defined below), an "Account") held by Consumers.
Consumers in its respective capacities as Collection Agent and as Bond
Servicer, and on behalf of its successors and assigns in such capacities,
agrees that it will (i) allocate amounts in the Accounts on a daily basis
between Collections with respect to Receivables and Securitization Charge
Collections in accordance with the allocation methodology set forth in
Annex 2 to the Servicing Agreement and (ii) thereafter (x) allocate and
apply Collections with respect to Receivables in accordance with the RPA's
and (y) allocate and apply Securitization Charge Collections in accordance
with the Servicing Agreement.
<PAGE>

                     (b) The Bond Trustee and the Bond Issuer waive any
interest in deposits to the Accounts to the extent that they are properly
allocable to Collections with respect to Receivables, and the Purchasers
waive any interest in deposits to the Accounts to the extent that they are
properly allocable to Securitization Charge Collections. Each of the
parties hereto acknowledges the respective security interests of the others
in the Accounts to the extent of their respective interests as described in
this Agreement.

                  3. (a) The Purchasers hereby acknowledge that,
notwithstanding anything in the RPA's to the contrary, all Securitization
Charge Collections are property of the Bond Issuer pledged to the Bond
Trustee, subject to the terms of the Indenture, the Sale Agreement and the
Servicing Agreement. Each of the Bond Issuer and the Bond Trustee hereby
acknowledges that, notwithstanding anything in the Sale Agreement or the
Indenture to the contrary, all Collections with respect to the Receivables
are the property of the Purchasers, subject to the terms of the respective
RPA.

                     (b) Each of the Purchasers hereby releases all liens
and security interests of any kind whatsoever which any Purchaser (or any
trustee or agent acting on its behalf) may hold in the Transferred
Securitization Property. Each of the Purchasers agrees, upon the reasonable
request of Consumers or the Bond Trustee, to execute and deliver to the
Bond Trustee such UCC partial release statements and other documents and
instruments, and do such other acts and things, as the Consumers or Bond
Trustee may reasonably request in order to evidence the release provided
for in this Section 3(b) and/or to execute and deliver to the Bond Trustee
UCC financing statement amendments to exclude the Transferred
Securitization Property from the assets covered by any existing UCC
financing statements relating to the Receivables; provided, however, that
failure to execute and deliver any such partial release statements,
financing statement amendments, documents or instruments, or to do such
acts and things, shall not affect or impair the release provided for in
this Section 3(b).

                     (c) Each of the Bond Issuer and the Bond Trustee
hereby releases all liens and security interests of any kind whatsoever
which either of them may hold in the Receivables. Each of the Bond Issuer
and the Bond Trustee agrees, upon the reasonable request of the Servicing
Agent, to execute and deliver to the Servicing Agent such UCC partial
release statements and other documents and instruments, and do such other
acts and things, as the Servicing Agent may reasonably request in order to
evidence the release provided for in this Section 3(c) and/or to execute
and deliver to the Servicing Agent UCC financing statement amendments to
exclude such Receivables from the assets covered by any existing UCC
financing statements relating to the Transferred Securitization Property;
provided, however, that failure to execute and deliver any such partial
release statements, financing statement amendments, documents or
instruments, or to do such acts and things, shall not affect or impair the
release provided for in this Section 3(c).

<PAGE>
                  4. The acknowledgments contained in Sections 1, 2 and 3
of this Agreement are applicable irrespective of the time or order of
attachment or perfection of security or ownership interests or the time or
order of filing or recording of financing statements or mortgages.

                  5. (a) Subject to the remaining provisions of this
Section 5(a), the Purchasers recognize the existence of rights in favor of
the Bond Trustee under the Indenture to replace Consumers as Bond Servicer
under the Servicing Agreement, and the Bond Issuer and the Bond Trustee
recognize the existence of rights in favor of the Servicing Agent under the
RPA's to replace Consumers as Collection Agent under the RPA's. If the Bond
Trustee is entitled to and desires to exercise its right to replace
Consumers or its successor as Bond Servicer under the Servicing Agreement,
or the Servicing Agent is entitled to and desires to exercise its right to
replace Consumers or its successor as Collection Agent under the RPA's, the
party desiring to exercise such right shall give written notice to the
other party and shall consult with the other party with respect to the
person which would replace Consumers or its successor in such capacities.
Any successor in such capacities shall be agreed to by both the Bond
Trustee and the Servicing Agent within ten Business Days of the date of
such notice and shall be subject to the Rating Agency Condition (as defined
below). In recognition of the fact that the rights and duties of the Bond
Servicer under the Servicing Agreement and of the Collection Agent under
the RPA's overlap in certain circumstances, the parties agree that, except
as provided in Section 5(b) below, the Bond Servicer and the Collection
Agent shall be the same person. The person named as replacement Bond
Servicer and replacement Collection Agent in accordance with this Section
5(a) is referred to herein as the "Replacement Servicer".

                     (b) In the event that either the Bond Trustee is
entitled to and desires to exercise its rights to take control of
Securitization Charge Collections, or the Servicing Agent is entitled to
and desires to exercise its rights to take control of Collections with
respect to the Receivables, then the parties hereto agree that CIBC, if and
for so long as it is rated not less than A+ by S&P, A1 by Moody's and, if
rated by Fitch, A+ by Fitch (each as defined in the Indenture), or, if CIBC
is unable or unwilling to act in that capacity, such other financial
institution as is selected by the Bond Trustee and the Servicing Agent
subject to satisfaction of the Rating Agency Condition (the "Designated
Account Holder") shall (i) use commercially reasonable efforts to take
control of the Accounts (by delivering to the Lock-Box Banks notice in the
form of Exhibit E to the RPA's), (ii) cooperate with the Bond Trustee and
provide to the Bond Trustee any necessary information in the Designated
Account Holder's possession in connection with the delivery by the Bond
Trustee to the obligors under the Receivables and the Securitization
Charges of a notification to the effect that the Securitization Charge
Collections are owned by the Bond Issuer and have been pledged to the Bond
Trustee, (iii) allocate Collections of Receivables and Securitization
Charge Collections in accordance with Section 2(a)(i) hereof in accordance
with the allocation methodology set forth in Annex 2 to the Servicing
Agreement on the basis of billing information provided to the Designated
Account Holder by Consumers or the Replacement Servicer, as applicable,
provided that if Consumers or the Replacement Servicer, as applicable,
fails to provide such billing information for any billing month, the
Designated Account Holder shall make such allocation on the basis of the
billing information for the last month for which such information was
provided, (iv) remit Collections of Receivables in accordance with the
instructions of the Collection Agent and remit Securitization Charge
Collections in accordance with the instructions of the Bond Servicer, and
(v) maintain records as to the amounts deposited into the Accounts, the
amounts remitted therefrom and the application and allocation of such
amounts as provided in clauses (iii) and (iv) above; provided that the
Designated Account Holder shall not be required to take any action at the
<PAGE>
request of the Servicing Agent or the Bond Trustee unless the Designated
Account Holder has been assured to its satisfaction that it will be
indemnified by Consumers against any and all liability and expense which it
may incur in taking or continuing to take such action. The fees and
expenses of the Designated Account Holder shall be payable from amounts
deposited into the Accounts on a pro rata basis as between Collections of
Receivables and Securitization Charge Collections, provided that that
portion of those fees and expenses allocable to Securitization Charge
Collections shall be payable by the Bond Servicer from the servicer fees
provided for in the Servicing Agreement. The Bond Trustee, the Bond Issuer,
the Servicing Agent, and the Purchasers shall each have the right to
require an accounting from time to time (but not more frequently than
monthly) of collections, allocations and remittances by the Designated
Account Holder.

                     (c) Subject to the provisions of this Section 5, the
parties hereto recognize the existence of rights in favor of the Bond
Trustee under the Indenture to assume control of Securitization Charge
Collections as provided in the Indenture, the Servicing Agreement, the Act
and the Financing Order (whether by means of court ordered sequestration or
otherwise), and of the Servicing Agent under the RPA's to assume control of
Collections with respect to the Receivables as provided in the RPA's.
Notwithstanding the foregoing, in no event may the Bond Trustee take any
action with respect to the Securitization Charge Collections in a manner
that would result in the Bond Trustee obtaining possession of, or any
control over, Collections of Receivables or any Account. In the event that
the Bond Trustee obtains possession of any Collections related to the
Receivables, the Bond Trustee shall notify the Servicing Agent of such
fact, shall hold them in trust and shall promptly deliver them to the
Servicing Agent upon request. Notwithstanding the foregoing, in no event
may the Servicing Agent take any action with respect to the Collection of
Receivables in a manner that would result in the Servicing Agent obtaining
possession of, or any control over, Securitization Charge Collections or
any Account, except as provided in Section 5(b) above. In the event that
the Servicing Agent obtains possession of any Securitization Charge
Collections, the Servicing Agent shall notify the Bond Trustee of such
fact, shall hold them in trust and shall promptly deliver them to the Bond
Trustee upon request.

                     (d) Anything in this Agreement to the contrary
notwithstanding, any action taken by either the Bond Trustee or the
Servicing Agent pursuant to Section 5(a) hereof shall be subject to the
Rating Agency Condition and the consent, if required by law, regulation or
regulatory order, of the Michigan Public Service Commission. For the
purposes of this Agreement, the "Rating Agency Condition" means, with
respect to any such action, notification to each rating agency then rating
any class or series of the Securitization Bonds of such action, and the
receipt of notification from each of Fitch and S&P that such action will
not result in a reduction or withdrawal of its rating on such
Securitization Bonds. The parties hereto acknowledge and agree that the
approval or the consent of the rating agencies which is required in order
to satisfy the Rating Agency Condition is not subject to any standard of
commercial reasonableness, and the parties are bound to satisfy this
condition whether or not the rating agencies are unreasonable or arbitrary.

                  6. (a) Subject to Section 5(c) hereof, none of the
Purchasers or the Servicing Agent, in their respective capacities as such,
is the agent of, or owes any fiduciary obligation to, the Bond Trustee, the
Bond Issuer, the Securitization Bondholders or any other party under this
Agreement. Each of the Bond Trustee (on behalf of itself and the
Securitization Bondholders), the Bond Issuer and Consumers hereby waives
any right that it may now have or hereafter acquire to make any claim
against the Purchasers or the Servicing Agent, in their respective
capacities as such, on the basis of any such fiduciary obligation
hereunder. Subject to Section 5(c) hereof, neither the Bond Trustee nor the
Bond Issuer is the agent of, or owes any fiduciary obligation to, any of
the Purchasers or any other party under this Agreement. Each of the
Purchasers and Consumers hereby waives any right that it may now have or
hereafter acquire to make any claim against the Bond Trustee or the Bond
Issuer on the basis of any such fiduciary obligation hereunder.
<PAGE>

                     (b) Notwithstanding anything herein to the contrary,
none of the Purchasers, the Servicing Agent, the Bond Trustee or the Bond
Issuer shall be required to take any action that exposes it to personal
liability or that is contrary to the Indenture, the Servicing Agreement,
the RPA's or applicable law.

                     (c) None of the Purchasers, the Servicing Agent, the
Bond Trustee or the Bond Issuer nor any of their respective directors,
officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence, bad faith or
willful misconduct. Without limiting the foregoing, each of the Purchasers,
the Servicing Agent, the Bond Trustee and the Bond Issuer: (i) may consult
with legal counsel, independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to
be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) makes no warranty or representation to any
party and shall not be responsible to any party for any statements,
warranties or representations made by any other party in connection with
this Agreement or any other agreement; (iii) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement or any other agreement on
the part of any other party; and (iv) shall incur no liability under or in
respect of this Agreement by acting upon any writing (which may be by
facsimile) believed by it in good faith to be genuine and signed or sent by
the proper party or parties.

                  7. The Servicing Agent, the Purchasers, Consumers, the
Collection Agent and the Bond Servicer agree that the Lock-Box Agreements
in the form attached to the RPA's as Exhibit F shall not be amended,
altered or supplemented in any material respect or terminated without the
prior written consent of the Bond Trustee.

                  8. The Servicing Agent, the Bond Trustee and Consumers
agree to cooperate with each other and to make available to each other or
any Replacement Servicer any and all records and other data relevant to the
Bond Issuer Assets and the Receivables which it may from time to time
receive from Consumers (or its successor) including, without limitation,
any and all computer programs, data files, documents, instruments, files
and records and any receptacles and cabinets containing the same.

                  9. Nothing herein contained shall be deemed as effecting
a joint venture among the Purchasers, the Servicing Agent, Consumers, the
Bond Issuer and the Bond Trustee.

                  10. For the purpose of this Agreement, the Purchasers
hereby consent and agree to the method of adjustment of the Securitization
Charge set forth in Section 4.01 of the Servicing Agreement and irrevocably
waive any right to object to or enjoin such adjustment.

                  11. This Agreement shall terminate upon the payment in
full of either the Securitization Bonds or the termination of both RPA's in
accordance with their respective terms, except that the understandings and
acknowledgments contained in Sections 1, 2, 3, 4, 6 and 16 shall survive
the termination of this Agreement.

                  12. (a) This Agreement shall be governed by the laws of
the State of New York.

                      (b) In connection with any suit, claim, action or
proceeding arising out of or relating to this Agreement and the
transactions contemplated hereby, each party hereto hereby consents to the
in personam jurisdiction of any court of the State of New York or any U.S.
federal court located in the Borough of Manhattan in the City of New York,
State of New York; each party hereto agrees that service by registered
mail, or any other form equivalent thereto (or, in the alternative, by any
other means sufficient under applicable law, rules and regulations) at the
addresses set forth in Section 19 hereof shall be valid and sufficient for
all purposes; and each party hereto agrees to, and irrevocably waives any
objection based on forum non conveniens or venue not to, appear in such
state or U.S. federal court located in the Borough of Manhattan.
<PAGE>

Each of Consumers and the Bond Issuer irrevocably designates CT Corporation
System, 111 Eighth Avenue, New York, NY 10011, as its agent and
attorney-in-fact for the acceptance of service of process and making an
appearance on its behalf in any such action or proceeding and taking all
such acts as may be necessary or appropriate in order to confer
jurisdiction over it by such state or U.S. federal court in the Borough of
Manhattan, and each of such parties stipulates that such appointment is
irrevocable and coupled with an interest.

                      (c) EACH OF THE PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

                  13. The Purchasers, Consumers, the Bond Issuer, the Bond
Trustee, the Bond Servicer and the Collection Agent agree to execute any
and all agreements, instruments, financing statements, releases and any and
all other documents reasonably requested by any other party hereto in order
to effectuate the intent of this Agreement. In each case where a release is
to be given pursuant to this Agreement, the term release shall include any
documents or instruments necessary to effect a release, as contemplated by
this Agreement. All releases, subordinations and other instruments
submitted to the executing party are to be prepared at the expense of
Consumers.

                  14. This Agreement is solely for the benefit of the
Purchasers, the Servicing Agent, Consumers, the Bond Issuer, the Bond
Trustee (individually and for the benefit of the Securitization
Bondholders), the Bond Servicer and the Collection Agent, and no other
person or entity shall have any rights, benefits, priority or interest
under or because of the existence of this Agreement.

                  15. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each
of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.

                  16. Notwithstanding any prior termination of this
Agreement or the Indenture, each of the parties hereto hereby covenants and
agrees that it shall not, prior to the date which is one year and one day
after the termination of the Indenture and the payment in full of the
Securitization Bonds, any other amounts owed under the Indenture,
including, without limitation, any amounts owed to third-party credit
enhancers or under any interest rate swap agreement, acquiesce, petition or
otherwise invoke or cause the Bond Issuer to invoke the process of any
court or government authority for the purpose of commencing or sustaining a
case against the Bond 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 Bond
Issuer or any substantial part of the property of the Bond Issuer, or
ordering the winding up or liquidation of the affairs of the Bond Issuer.
<PAGE>

                  17. Each of the Purchasers and the Servicing Agent agrees
that it will not (i) challenge the transfer of Bond Issuer Assets from
Consumers to the Bond Issuer, whether on the grounds that such transfer was
a disguised financing or a fraudulent conveyance or otherwise, so long as
such transfer is carried out in all material respects in accordance with
the Sale Agreement and related documents, or (ii) assert that Consumers and
the Bond Issuer should be substantively consolidated. The Bond Trustee
agrees that it will not challenge any transfer of the Receivables from
Consumers to the Purchasers, whether on the grounds that such transfer was
a disguised financing or a fraudulent conveyance or otherwise, so long as
such transfer is carried out in all material respects in accordance with
the RPA's and related documents.

                  18. (a) Consumers hereby represents and warrants to the
Bond Issuer and the Bond Trustee that the forms of the RPA's delivered to
the Bond Issuer and the Bond Trustee concurrently herewith are the RPA's as
amended (to reflect the provisions specified in Exhibit A hereto) and as in
effect on the date hereof. Consumers hereby covenants to the Bond Issuer
and the Bond Trustee that it will not (i) amend, supplement or terminate
any of the provisions of either of the RPA's specified in Exhibit A hereto
without the prior written consent of the Bond Trustee and satisfaction of
the Rating Agency Condition, as well as delivery to each Rating Agency of
the form of the proposed amendment or supplement, or (ii) agree to any
additional person becoming a purchaser under either of the RPA's unless
such person has theretofore agreed, in a written instrument delivered to
the Bond Issuer and the Bond Trustee and satisfactory to the Bond Trustee,
to be bound by the terms of, and to become a party as a "Purchaser" to,
this Agreement.

                      (b) Notwithstanding any provision of this Agreement
to the contrary, upon the termination, substitution or assignment of the
RPA's in connection with a restructuring of Consumers' Receivables
securitization program, upon the written request of Consumers, the Bond
Issuer and the Bond Trustee agree to enter into a replacement intercreditor
agreement with the parties to such restructured Receivables program having
substantially the same terms and provisions as this Agreement upon (i)
receipt by the Trustee of an opinion of counsel satisfactory to the Bond
Trustee to the effect that the substitution of such replacement
intercreditor agreement and such restructured Receivables program and the
related documentation will not adversely affect the rights and interests of
the Transition Bondholders, the Bond Issuer or the Bond Trustee and (ii)
satisfaction of the Rating Agency Condition.

                  19. Unless otherwise specifically provided herein, all
notices, directions, consents and waivers required under the terms and
provisions of this Agreement shall be 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,

         in the case of Consumers, at Consumers Energy Company, 212 W.
         Michigan Avenue, Jackson, Michigan 49201; telephone:(800)
         477-5050; fax: (517) 788-2186; email:customer@consumersenergy.com;

         in the case of the Bond Issuer, at Consumers Funding LLC, 212 W.
         Michigan Avenue, Suite M-1029, Jackson, Michigan 49201; telephone:
         (517) 788-0179; fax: (517) 788- 0768; email:
         mdvanhem@cmsenergy.com;

         in the case of the Bond Trustee, at 5 Penn Plaza, 16th Floor, New
         York, New York 10001-1803, Attention: Asset Backed Securities
         (ABS); telephone: (212) 328-7543; fax: (212) 328-7623; email:
         cdshedd@bankofny.com;

         in the case of CIBC, Attention: R. Santos, at 425 Lexington
         Avenue, New York, New York 10017; telephone: (212) 856-3811; fax:
         (212) 856-3643; email: richard.santos@us.cibc.com;
<PAGE>

         in the case of ASCC, Attention: R. Santos, at 425 Lexington
         Avenue, New York, New York 10017; telephone: (212) 856-3811; fax:
         (212) 856-3643; email: richard.santos@us.cibc.com;

         in the case of Moody's, at Moody's Investors Service, Inc., ABS
         Monitoring Department, 99 Church Street, New York, New York 10007;
         telephone: (212) 553-0300; fax: (212) 553-4642; email:
         fabrikant@moodys.com;

         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; telephone: (212) 438-2000; fax:
         (212) 438-2655; email: Tom_currie@standardandpoors.com; and

         in the case of Fitch, at Fitch, Inc., 1 State Street Plaza, New
         York, New York 10004, Attention: ABS Surveillance; telephone:
         (212) 908-0500; fax:(212) 480-4438;
         email:James.grady@fitchratings.com;

or, as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.

                  20. No delay upon the part of any party to this Agreement
in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise by any such party of any
right, power or remedy preclude other or further exercise thereof, or the
exercise of any other right, power or remedy. No waiver, amendment or other
modification, or consent with respect to, any provision of this Agreement
shall be effective unless the same shall be in writing and shall be signed
by each of the parties hereto.

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

                                        CANADIAN IMPERIAL BANK OF COMMERCE
                                        Individually and as Servicing Agent


                                        By: /s/ Robert L. Stern Jr.
                                        ---------------------------------------
                                        Name: Robert L. Stern Jr.
                                        Title: Authorized Signatory

                                        ASSET SECURITIZATION COOPERATIVE
                                        CORPORATION


                                        By: /s/ Joyce Pernin
                                        ---------------------------------------
                                        Name: Joyce Pernin
                                        Title: Vice President

                                        CONSUMERS ENERGY COMPANY
                                        Individually, as Collection Agent
                                        and as Bond Servicer


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

                                        THE BANK OF NEW YORK,
                                          as Bond Trustee


                                        By: /s/ Cassandra D. Shedd
                                        ---------------------------------------
                                        Name: Cassandra D. Shedd
                                        Title: Assistant Vice President

                                        CONSUMERS FUNDING LLC


                                        By: /s/ Laura L. Mountcastle
                                        ---------------------------------------
                                        Name: Laura L. Mountcastle
                                        Title: President, Chief Executive
                                               Officer, Chief Financial Officer
                                               and Treasurer

<PAGE>


         [THE FOLLOWING PROVISIONS TO APPEAR IN THE AMENDED RPA'S]


Article I:        [Definition of Receivable:]

                  "Receivable" means the obligation of an Obligor to pay
                  for electricity, natural gas, electric and natural gas
                  power or other energy products or merchandise sold or
                  services rendered by the Seller, and includes the
                  Seller's rights to payment of any interest, financing
                  charges or late fees and the merchandise (including
                  returned goods) and contracts relating to such
                  Receivable, all security interests, guaranties and
                  property securing or supporting payment of such
                  Receivable, all books and records relating to the
                  Receivables and all proceeds of the foregoing.
                  Notwithstanding the foregoing, "Receivable" does not
                  include (i) Transferred Securitization Property or (ii)
                  the books and records relating solely to the Transferred
                  Securitization Property, provided that the determination
                  of what constitutes collections of the Securitization
                  Charge in respect of Transferred Securitization Property
                  shall be made in accordance with the allocation
                  methodology specified in Annex 2 to the Servicing
                  Agreement.

                  [Additional Definitions:]

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

                  "Intercreditor Agreement" means the Intercreditor
                  Agreement dated as of November 8, 2001 among Canadian
                  Imperial Bank of Commerce, Asset Securitization
                  Cooperative Corporation, The Bank of New York, as
                  trustee, Consumers Funding LLC, and Consumers Energy
                  Company.

                  "Securitization Charge" has the meaning specified in
                  Appendix A to the Servicing Agreement.

                  "Securitization Charge Collections" has the meaning
                  specified in Appendix A to the Servicing Agreement.

                  "Securitization Property" means "securitization property"
                  within the meaning of the Michigan Customer Choice and
                  Electricity Reliability Act, 2000 PA 141 and 2000 PA 142
                  as approved in the Financing Order

                  "Transferred Securitization Property" has the meaning
                  specified in Appendix A to the Servicing Agreement.

                  "Servicing Agreement" means the Servicing Agreement dated
                  as of November 8, 2001 between Consumers Funding LLC and
                  Consumers Energy Company, as the same may be amended and
                  supplemented from time to time with the consent of the
                  Purchaser (to the extent such consent is required by the
                  terms of this Agreement).

<PAGE>
Section 7.2:      Application of Collections. The Collection Agent shall,
                  upon receipt of payments of amounts billed and collected
                  from customers of Consumers on their utility bills,
                  allocate those receipts on a daily basis between
                  Collections of Receivables and Securitization Charge
                  Collections in accordance with the allocation methodology
                  specified in Annex 2 to the Servicing Agreement.

Section 10.1(h):      Instruct all Obligors to cause all Collections and
                      Securitization Charge Collections to be deposited
                      directly into a Lock-Box.

Section 10.3(e):      Deposit or otherwise credit, or cause or permit to be
                      so deposited or credited, to any Lock-Box cash or
                      cash proceeds other than Collections and
                      Securitization Charge Collections.

Section 11.1(h):      the commingling of Collections with other funds of
                      the Seller other than Securitization Charge
                      Collections;

Exhibit E:        [New clauses (iii) and (iv) at the end of the first
                  paragraph:]

                  and (iii) The Bank of New York, or any successor thereto,
                  as trustee (the "Bond Trustee") under the Indenture dated
                  as of November 8, 2001 between the Seller and the Bond
                  Trustee, as supplemented, and (iv) Consumers Funding LLC,
                  as issuer of the Securitization Bonds.

Exhibit F:        [New clause at the end of the first sentence of the second
                  paragraph:]

                  and for the benefit of The Bank of New York, as trustee
                  (the "Bond Trustee") under the Indenture dated as of
                  November 8, 2001 between the Seller and the Bond Trustee,
                  as supplemented, and for the benefit of Consumers Funding
                  LLC, as Issuer of the Securitization Bonds (the "Bond
                  Issuer").

                  [New clause (iii) at the end of the first paragraph of
                  Attachment A to Lock Box Agreement:]

                  and (iii) for the benefit of The Bank of New York, as
                  trustee (the "Bond Trustee") under the Indenture dated as
                  of November 8, 2001 between the Seller and the Bond
                  Trustee, as supplemented, and for the benefit of
                  Consumers Funding LLC, as Issuer of the Securitization
                  Bonds.

Exhibit F:        [Fourth line of the third paragraph:]

                  of the Purchasers, the Bond Issuer and the Bond Trustee and
                  all instructions and thereafter regarding the




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>13
<FILENAME>k65350ex12.txt
<DESCRIPTION>STATEMENT RE: COMPUTATION OF RATIOS OF EARNINGS
<TEXT>
<PAGE>
                                                                    EXHIBIT (12)

                          CONSUMERS ENERGY CORPORATION
                       Ratio of Earnings to Fixed Charges
                              (Millions of Dollars)


<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
                                                 Nine Months
                                                    Ended
                                                September 30,
                                                    2001        2000          1999         1998           1997        1996
- -------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>          <C>        <C>        <C>           <C>        <C>
- -------------------------------------------------------------------------------------------------------------------------------
Earnings as defined:
- -------------------------------------------------------------------------------------------------------------------------------
Net income                                          $  88        $ 304        $ 340        $ 349(b)        $ 321        $ 296
- -------------------------------------------------------------------------------------------------------------------------------
Net income (loss) after preferred dividends         $  57        $ 268        $ 313        $ 312(b)        $ 284        $ 260
    And distributions
- -------------------------------------------------------------------------------------------------------------------------------
Income taxes                                           41        $ 148          172          158             152          150
- -------------------------------------------------------------------------------------------------------------------------------
Exclude equity basis subsidiaries                     (32)         (57)         (50)         (50)            (49)         (42)
- -------------------------------------------------------------------------------------------------------------------------------
Distributed income of equity investees                  8           10           10           12
- -------------------------------------------------------------------------------------------------------------------------------
Fixed charges as defined, adjusted to
  exclude capitalized interest of $4, $2, $0,
  $1, $1 and $2 million for the six months
  ended June 30, 2001 and for the years ended
  December 31, 2000, 1999, 1998, 1997 and
  1996, respectively                                  149          194          192          185             182          175
- -------------------------------------------------------------------------------------------------------------------------------

Earnings as defined                                 $ 254        $ 599        $ 664        $ 654           $ 606        $ 579
- -------------------------------------------------------------------------------------------------------------------------------

- -------------------------------------------------------------------------------------------------------------------------------
Fixed charges as defined:
Interest on long-term debt                          $ 111        $ 141        $ 140        $ 138           $ 138        $ 139
- -------------------------------------------------------------------------------------------------------------------------------
Estimated interest portion of lease rental              8           11           11           10               9            9
- -------------------------------------------------------------------------------------------------------------------------------
Other interest charges                                 35           44           41           38              36           29
- -------------------------------------------------------------------------------------------------------------------------------

- -------------------------------------------------------------------------------------------------------------------------------
Fixed charges as defined                            $ 154        $ 196        $ 192        $ 186           $ 183        $ 177
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of earnings to: (a)
- -------------------------------------------------------------------------------------------------------------------------------
 Fixed charges                                       1.65         3.06         3.46         3.16(c)         3.31         3.27
- -------------------------------------------------------------------------------------------------------------------------------
Fixed charges & preferred dividends                  1.37         2.57         2.99         2.52(d)         2.61         2.54
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES:

(a)  For purposes of computing the ratio, earnings represent net income before
     income taxes, net interest charges and the estimated interest portions of
     lease rentals, plus distributed income of equity investees less earnings
     from minority interests of equity investees. Earnings for the ratio of
     earnings to fixed charges and preferred stock dividends also includes the
     amount required to pay distributions on preferred securities and the amount
     of pretax earnings required to pay the distributions on outstanding
     preferred stock.

(b)  Includes a pre-tax $66 million increase due to a one-time change in method
     of accounting for property taxes.


(c)  Excludes a cumulative effect of change-in-accounting, after-tax gain of $43
     million; if included, ratio would be 3.52.

(d)  Excludes a cumulative effect of change-in-accounting, after-tax gain of $43
     million; if included, ratio would be 2.81.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-15
<SEQUENCE>14
<FILENAME>k65350ex15.txt
<DESCRIPTION>LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION
<TEXT>
<PAGE>
                                                                   EXHIBIT (15)




November 16, 2001

To Consumers Energy Company:

We are aware that Consumers Energy Company has incorporated by reference in this
registration statement its Form 10-Q for the quarters ended March 31, 2001, June
30, 2001 and September 30, 2001, which include our reports dated April 27, 2001
and July 31, 2001, respectively, covering the unaudited interim financial
information contained therein. Pursuant to Regulation C of the Securities Act of
1933, this report is not considered a part of the registration statement
prepared or certified by our Firm or a report prepared or certified by our Firm
within the meaning of Sections 7 and 11 of the Act.



Very truly yours,





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.(C)
<SEQUENCE>15
<FILENAME>k65350ex23-c.txt
<DESCRIPTION>CONSENT OF ARTHUR ANDERSEN, LLP
<TEXT>
<PAGE>
                                                                EXHIBIT (23)(C)






                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 2, 2001
included or incorporated by reference in Consumers Energy Company's Form 10-K
for the year ended December 31, 2000 and to all references to our Firm included
in this registration statement.





Detroit, Michigan,
      November 16, 2001


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>16
<FILENAME>k65350ex24.txt
<DESCRIPTION>POWERS OF ATTORNEY
<TEXT>
<PAGE>

                                                                      EXHIBIT 24


October 4, 2001

Mr. Alan M. Wright and
Mr. Thomas A. McNish
Consumers Energy Company
212 West Michigan Avenue
Jackson, MI 49201


We hereby appoint each of you lawful attorney for each of us and in each of our
names to sign and cause to be filed with the Securities and Exchange Commission
registration statement(s) and/or any amendment(s) thereto, including
post-effective amendment or amendments, to be accompanied in each case by a
prospectus or supplemental prospectus and any necessary exhibits with respect to
the issue and sale of up to $500 million of any debt securities of the Company
(plus an additional 20% for the purpose of covering underwriters'
over-allotments, price adjustments, or sale of additional securities).


Very truly yours,





/s/David W. Joos
David W. Joos



<PAGE>



September 28, 2001

Mr. Alan M. Wright and
Mr. Thomas A. McNish
Consumers Energy Company
212 West Michigan Avenue
Jackson, MI 49201


We hereby appoint each of you lawful attorney for each of us and in each of our
names to sign and cause to be filed with the Securities and Exchange Commission
registration statement(s) and/or any amendment(s) thereto, including
post-effective amendment or amendments, to be accompanied in each case by a
prospectus or supplemental prospectus and any necessary exhibits with respect to
the issue and sale of up to $500 million of any debt securities of the Company
(plus an additional 20% for the purpose of covering underwriters'
over-allotments, price adjustments, or sale of additional securities).


Very truly yours,



/s/William T. McCormick, Jr.                       /s/John M. Deutch
William T. McCormick, Jr.                          John M. Deutch



/s/James J. Duderstadt                             /s/Kathleen R. Flaherty
James J. Duderstadt                                Kathleen R. Flaherty



/s/Earl D. Holton                                  /s/William U. Parfet
Earl D. Holton                                     William U. Parfet



/s/Percy A. Pierre                                 /s/Kenneth L. Way
Percy A. Pierre                                    Kenneth L. Way



/s/Kenneth Whipple                                 /s/John B. Yasinsky
Kenneth Whipple                                    John B. Yasinsky







</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25.A
<SEQUENCE>17
<FILENAME>k65350ex25-a.txt
<DESCRIPTION>STATEMENT OF ELIGIBILITY
<TEXT>
<PAGE>
                                                                   EXHIBIT 25(a)
   --------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                            -------------------------

                                    FORM T-1

                            STATEMENT OF ELIGIBILITY
                    UNDER THE TRUST INDENTURE ACT OF 1939 OF
                   A CORPORATION DESIGNATED TO ACT AS TRUSTEE
                   -------------------------------------------
               CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
                A TRUSTEE PURSUANT TO SECTION 305(b)(2)
                    ----------------------------------------

                            THE CHASE MANHATTAN BANK
               (Exact name of trustee as specified in its charter)


NEW YORK                                                              13-4994650
(State of incorporation                                         (I.R.S. employer
if not a national bank)                                      identification No.)

270 PARK AVENUE
NEW YORK, NEW YORK                                                         10017
(Address of principal executive offices)                              (Zip Code)

                               William H. McDavid
                                 General Counsel
                                 270 Park Avenue
                            New York, New York 10017
                               Tel: (212) 270-2611
            (Name, address and telephone number of agent for service)

            ---------------------------------------------------------
                            CONSUMERS ENERGY COMPANY
               (Exact name of obligor as specified in its charter)

MICHIGAN                                                              38-2726431
(State or other jurisdiction of                                 (I.R.S. employer
incorporation or organization)                               identification No.)

212 WEST MICHIGAN AVENUE
JACKSON, MICHIGAN                                                          49201
 (Address of principal executive offices)                             (Zip Code)

       -------------------------------------------------------------------
                                  SENIOR NOTES
                       (Title of the indenture securities)

       -------------------------------------------------------------------


<PAGE>


                                     GENERAL

Item 1.  General Information.

         Furnish the following information as to the trustee:

         (a) Name and address of each examining or supervising authority to
which it is subject.

               New York State Banking Department, State House, Albany, New York
               12110.

               Board of Governors of the Federal Reserve System, Washington,
               D.C., 20551

               Federal Reserve Bank of New York, District No. 2, 33 Liberty
               Street, New York, N.Y.

               Federal Deposit Insurance Corporation, Washington, D.C., 20429.


         (b) Whether it is authorized to exercise corporate trust powers.

               Yes.


Item 2.  Affiliations with the Obligor.

         If the obligor is an affiliate of the trustee, describe each such
affiliation.

         None.








                                       -2-

<PAGE>


Item 16.   List of Exhibits

           List below all exhibits filed as a part of this Statement of
Eligibility.

           1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).

           2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).

           3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.

           4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).

           5. Not applicable.

           6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).

           7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.

           8. Not applicable.

           9. Not applicable.

                                    SIGNATURE

         Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 19th day of November, 2001.

                                       THE CHASE MANHATTAN BANK

                                       By  /s/L. O'Brien
                                           L. O'Brien
                                           Vice President




                                      -3-


<PAGE>
                              Exhibit 7 to Form T-1


                                Bank Call Notice

                             RESERVE DISTRICT NO. 2
                       CONSOLIDATED REPORT OF CONDITION OF

                            The Chase Manhattan Bank
                  of 270 Park Avenue, New York, New York 10017
                     and Foreign and Domestic Subsidiaries,
                     a member of the Federal Reserve System,

                   at the close of business June 30, 2001, in
        accordance with a call made by the Federal Reserve Bank of this
        District pursuant to the provisions of the Federal Reserve Act.


<TABLE>
<CAPTION>
                                                                                                   DOLLAR AMOUNTS
                     ASSETS                                                                          IN MILLIONS
<S>                                                                                                <C>
Cash and balances due from depository institutions:
     Noninterest-bearing balances and
     currency and coin ............................................................................   $ 21,536
     Interest-bearing balances ....................................................................     31,428
Securities:
Held to maturity securities .......................................................................        481
Available for sale securities .....................................................................     60,903
Federal funds sold and securities purchased under
     agreements to resell .........................................................................     42,824
Loans and lease financing receivables:
     Loans and leases held for sale ...............................................................      3,856
     Loans and leases, net of unearned income   $153,575
     Less: Allowance for loan and lease losses     2,216
     Loans and leases, net of unearned income and
     allowance ....................................................................................    153,299
Trading Assets ....................................................................................     66,636
Premises and fixed assets (including capitalized leases)...........................................      4,468
Other real estate owned ...........................................................................         45
Investments in unconsolidated subsidiaries and
     associated companies .........................................................................        353
Customers' liability to this bank on acceptances
     outstanding ..................................................................................        346
Intangible assets
        Goodwill ..................................................................................      1,785
        Other Intangible assets ...................................................................      4,365
Other assets ......................................................................................     19,923
                                                                                                      --------
TOTAL ASSETS ......................................................................................   $412,248
                                                                                                      ========
</TABLE>


                                      -4-
<PAGE>

<TABLE>
<S>                                                                                                       <C>
                                                       LIABILITIES
Deposits
     In domestic offices ..............................................................................   $ 137,865
     Noninterest-bearing ..........   $  56,799
     Interest-bearing .............      81,066
     In foreign offices, Edge and Agreement
     subsidiaries and IBF's ...........................................................................     113,924
     Noninterest-bearing ..........   $   6,537
     Interest-bearing .............     107,387

Federal funds purchased and securities sold under
agreements to repurchase ..............................................................................      65,474
Trading liabilities ...................................................................................      39,611
Other borrowed money (includes mortgage indebtedness
     and obligations under capitalized leases) ........................................................      10,573
Bank's liability on acceptances executed and outstanding ..............................................         346
Subordinated notes and debentures .....................................................................       6,355
Other liabilities .....................................................................................      14,772
TOTAL LIABILITIES .....................................................................................     388,920
Minority Interest in consolidated subsidiaries ........................................................          89

                                                     EQUITY CAPITAL

Perpetual preferred stock and related surplus .........................................................           0
Common stock ..........................................................................................       1,211
Surplus  (exclude all surplus related to preferred stock) .............................................      12,715
    Retained earnings .................................................................................       9,985
    Accumulated other comprehensive income ............................................................        (672)
Other equity capital components .......................................................................           0
TOTAL EQUITY CAPITAL ..................................................................................      23,239
                                                                                                          ---------
TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL ..............................................   $ 412,248
                                                                                                          =========
</TABLE>

I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.

                               JOSEPH L. SCLAFANI

We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.


                                    WILLIAM B. HARRISON JR. )
                                    DOUGLAS A. WARNER III   ) DIRECTORS
                                    WILLIAM H. GRAY III     )


                                       -5-



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25.B
<SEQUENCE>18
<FILENAME>k65350ex25-b.txt
<DESCRIPTION>STATEMENT OF ELIGIBILTY
<TEXT>
<PAGE>
                                                                  EXHIBIT 25(b)
================================================================================

                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) |__|



                              THE BANK OF NEW YORK
               (Exact name of trustee as specified in its charter)

New York                                                     13-5160382
(State of incorporation                                      (I.R.S. employer
if not a U.S. national bank)                                 identification no.)

One Wall Street, New York, N.Y.                              10286
(Address of principal executive offices)                     (Zip code)



                            CONSUMERS ENERGY COMPANY
               (Exact name of obligor as specified in its charter)


Michigan                                                     38-2726431
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


212 West Michigan Avenue
Jackson, Michigan                                            49201
(Address of principal executive offices)                     (Zip code)

                                  -------------

                             Subordinated Debentures
                       (Title of the indenture securities)

================================================================================

<PAGE>


1.       GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
         TRUSTEE:

         (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
                  Name                                                    Address
- ---------------------------------------------------------------------------------------------------------------
<S>                                                           <C>
        Superintendent of Banks of the State of                           2 Rector Street, New York,
        New York                                                          N.Y.  10006, and Albany, N.Y. 12203

        Federal Reserve Bank of New York                                  33 Liberty Plaza, New York,
                                                                          N.Y.  10045

        Federal Deposit Insurance Corporation                             Washington, D.C.  20429

        New York Clearing House Association                               New York, New York   10005
</TABLE>

        (B)    WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

        Yes.

2.      AFFILIATIONS WITH OBLIGOR.

        IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.

        None.

16.     LIST OF EXHIBITS.

        EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
        ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
        RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
        C.F.R. 229.10(D).

        1.     A copy of the Organization Certificate of The Bank of New York
               (formerly Irving Trust Company) as now in effect, which contains
               the authority to commence business and a grant of powers to
               exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
               Form T-1 filed with Registration Statement No. 33-6215, Exhibits
               1a and 1b to Form T-1 filed with Registration Statement No.
               33-21672 and Exhibit 1 to Form T-1 filed with Registration
               Statement No. 33-29637.)

        4.     A copy of the existing By-laws of the Trustee.  (Exhibit 4 to
               Form T-1 filed with Registration Statement No. 33-31019.)

        6.     The consent of the Trustee required by Section 321(b) of the Act.
               (Exhibit 6 to Form T-1 filed
               with Registration Statement No. 33-44051.)

        7.     A copy of the latest report of condition of the Trustee published
               pursuant to law or to the requirements of its supervising or
               examining authority.


                                      -2-

<PAGE>

                                    SIGNATURE



        Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 20th day of November, 2001.


                                       THE BANK OF NEW YORK



                                       By:    /s/  STACEY POINDEXTER
                                           ------------------------------------
                                           Name:   STACEY POINDEXTER
                                           Title:  ASSISTANT TREASURER


<PAGE>
                                                                   EXHIBIT 25(b)
                                                                       EXHIBIT 7



- --------------------------------------------------------------------------------

                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2001,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.

<TABLE>
<CAPTION>
                                                                                              Dollar Amounts
ASSETS                                                                                          In Thousands
<S>                                                                                           <C>
Cash and balances due from depository
   institutions:
   Noninterest-bearing balances and currency
     and coin.............................................                                        $2,811,275
   Interest-bearing balances..............................                                         3,133,222
Securities:
   Held-to-maturity securities............................                                           147,185
   Available-for-sale securities..........................                                         5,403,923
Federal funds sold and Securities purchased
   under agreements to resell.............................                                         3,378,526
Loans and lease financing receivables:
   Loans and leases held for sale.........................                                            74,702
   Loans and leases, net of unearned
     income...............37,471,621
   LESS: Allowance for loan and
     lease losses............599,061
   Loans and leases, net of unearned
     income and allowance.................................                                        36,872,560
Trading Assets............................................                                        11,757,036
Premises and fixed assets (including
   capitalized leases)....................................                                           768,795
Other real estate owned...................................                                             1,078
Investments in unconsolidated subsidiaries
   and associated companies...............................                                           193,126
Customers' liability to this bank on
   acceptances outstanding................................                                           592,118
Intangible assets.........................................
   Goodwill...............................................                                         1,300,295
   Other intangible assets................................                                           122,143
Other assets..............................................                                         3,676,375
                                                                                                   ---------
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                              <C>
Total assets...........................................                                          $70,232,359
                                                                                                 ===========

LIABILITIES
Deposits:
   In domestic offices.................................                                          $25,962,242
   Noninterest-bearing.......................10,586,346
   Interest-bearing..........................15,395,896
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs............................                                           24,862,377
   Noninterest-bearing..........................373,085
   Interest-bearing..........................24,489,292
Federal funds purchased and securities sold under
   agreements to repurchase............................                                            1,446,874
Trading liabilities....................................                                            2,373,361
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases).......                                                                1,381,512
Bank's liability on acceptances executed and
   outstanding.........................................                                              592,804
Subordinated notes and debentures......................                                            1,646,000
Other liabilities......................................                                            5,373,065
Total liabilities......................................                                          $63,658,235
EQUITY CAPITAL
Common stock...........................................                                            1,135,284
Surplus................................................                                            1,008,773
Retained earnings......................................                                            4,426,033
Accumulated other comprehensive income.................                                                4,034
Other equity capital components........................                                                    0
- --------------------------------------------------------------- ---------------------------------------------
Total equity capital...................................                                            6,574,124
                                                                                                 -----------
Total liabilities and equity capital...................                                          $70,232,359
                                                                                                 ===========
</TABLE>


         I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.

                                                               Thomas J. Mastro,
                                           Senior Vice President and Comptroller

         We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been


<PAGE>

prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true and correct.

                     ----
Thomas A. Renyi          |
Gerald L. Hassell        |
Alan R. Griffith         |                  Directors
                     ----

- --------------------------------------------------------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25.C
<SEQUENCE>19
<FILENAME>k65350ex25-c.txt
<DESCRIPTION>STATEMENT OF ELIGIBILITY OF PROPERTY TRUSTEE
<TEXT>
<PAGE>


                                                                 EXHIBIT  25(c)
================================================================================

                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) |__|



                              THE BANK OF NEW YORK
               (Exact name of trustee as specified in its charter)

New York                                                     13-5160382
(State of incorporation                                      (I.R.S. employer
if not a U.S. national bank)                                 identification no.)

One Wall Street, New York, N.Y.                              10286
(Address of principal executive offices)                     (Zip code)



                      CONSUMERS ENERGY COMPANY FINANCING V
               (Exact name of obligor as specified in its charter)


Delaware                                                     To Be Applied For
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


212 West Michigan Avenue
Jackson, Michigan                                            49201
(Address of principal executive offices)                     (Zip code)

                                  -------------

                           Trust Preferred Securities
                       (Title of the indenture securities)

================================================================================

<PAGE>


1.       GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:

         (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
                  Name                                                    Address
- ---------------------------------------------------------------------------------------------------------------
<S>                                                           <C>
        Superintendent of Banks of the State of                           2 Rector Street, New York,
        New York                                                          N.Y. 10006, and Albany, N.Y. 12203

        Federal Reserve Bank of New York                                  33 Liberty Plaza, New York,
                                                                          N.Y. 10045

        Federal Deposit Insurance Corporation                             Washington, D.C. 20429

        New York Clearing House Association                               New York, New York 10005
</TABLE>

        (B)    WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

        Yes.

2.      AFFILIATIONS WITH OBLIGOR.

        IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.

        None.

16.     LIST OF EXHIBITS.

        EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
        ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
        RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
        C.F.R. 229.10(D).

        1.     A copy of the Organization Certificate of The Bank of New York
               (formerly Irving Trust Company) as now in effect, which contains
               the authority to commence business and a grant of powers to
               exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
               Form T-1 filed with Registration Statement No. 33-6215, Exhibits
               1a and 1b to Form T-1 filed with Registration Statement No.
               33-21672 and Exhibit 1 to Form T-1 filed with Registration
               Statement No. 33-29637.)

        4.     A copy of the existing By-laws of the Trustee. (Exhibit 4 to
               Form T-1 filed with Registration Statement No. 33-31019.)

        6.     The consent of the Trustee required by Section 321(b) of the Act.
               (Exhibit 6 to Form T-1 filed with Registration Statement
               No. 33-44051.)

        7.     A copy of the latest report of condition of the Trustee published
               pursuant to law or to the requirements of its supervising or
               examining authority.


                                      -2-

<PAGE>

                                    SIGNATURE



        Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 20th day of November, 2001.


                                         THE BANK OF NEW YORK



                                         By:    /s/  STACEY POINDEXTER
                                             -----------------------------------
                                             Name:   STACEY POINDEXTER
                                             Title:  ASSISTANT TREASURER

<PAGE>
                                                                   EXHIBIT 25(c)
                                                                       EXHIBIT 7



- --------------------------------------------------------------------------------

                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2001,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.

<TABLE>
<CAPTION>
                                                                                              Dollar Amounts
ASSETS                                                                                          In Thousands
<S>                                                                                           <C>
Cash and balances due from depository
   institutions:
   Noninterest-bearing balances and currency
     and coin.............................................                                        $2,811,275
   Interest-bearing balances..............................                                         3,133,222
Securities:
   Held-to-maturity securities............................                                           147,185
   Available-for-sale securities..........................                                         5,403,923
Federal funds sold and Securities purchased
   under agreements to resell.............................                                         3,378,526
Loans and lease financing receivables:
   Loans and leases held for sale.........................                                            74,702
   Loans and leases, net of unearned
     income...............37,471,621
   LESS: Allowance for loan and
     lease losses............599,061
   Loans and leases, net of unearned
     income and allowance.................................                                        36,872,560
Trading Assets............................................                                        11,757,036
Premises and fixed assets (including
   capitalized leases)....................................                                           768,795
Other real estate owned...................................                                             1,078
Investments in unconsolidated subsidiaries
   and associated companies...............................                                           193,126
Customers' liability to this bank on
   acceptances outstanding................................                                           592,118
Intangible assets.........................................
   Goodwill...............................................                                         1,300,295
   Other intangible assets................................                                           122,143
Other assets..............................................                                         3,676,375
                                                                                                   ---------
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                              <C>
Total assets...........................................                                          $70,232,359
                                                                                                 ===========

LIABILITIES
Deposits:
   In domestic offices.................................                                          $25,962,242
   Noninterest-bearing.......................10,586,346
   Interest-bearing..........................15,395,896
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs............................                                           24,862,377
   Noninterest-bearing..........................373,085
   Interest-bearing..........................24,489,292
Federal funds purchased and securities sold under
   agreements to repurchase............................                                            1,446,874
Trading liabilities....................................                                            2,373,361
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases).......                                                                1,381,512
Bank's liability on acceptances executed and
   outstanding.........................................                                              592,804
Subordinated notes and debentures......................                                            1,646,000
Other liabilities......................................                                            5,373,065
Total liabilities......................................                                          $63,658,235
EQUITY CAPITAL
Common stock...........................................                                            1,135,284
Surplus................................................                                            1,008,773
Retained earnings......................................                                            4,426,033
Accumulated other comprehensive income.................                                                4,034
Other equity capital components........................                                                    0
- --------------------------------------------------------------- ---------------------------------------------
Total equity capital...................................                                            6,574,124
                                                                                                 -----------
Total liabilities and equity capital...................                                          $70,232,359
                                                                                                 ===========
</TABLE>


         I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.

                                                               Thomas J. Mastro,
                                           Senior Vice President and Comptroller

         We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been


<PAGE>

prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true and correct.

                     ----
Thomas A. Renyi          |
Gerald L. Hassell        |
Alan R. Griffith         |                  Directors
                     ----

- --------------------------------------------------------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25.D
<SEQUENCE>20
<FILENAME>k65350ex25-d.txt
<DESCRIPTION>STATEMENT OF ELIGIBILITY OF PROPERTY TRUSTEE
<TEXT>
<PAGE>
                                                                 EXHIBIT (25)(d)
================================================================================
                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) |__|



                              THE BANK OF NEW YORK
               (Exact name of trustee as specified in its charter)

New York                                                     13-5160382
(State of incorporation                                      (I.R.S. employer
if not a U.S. national bank)                                 identification no.)

One Wall Street, New York, N.Y.                              10286
(Address of principal executive offices)                     (Zip code)



                      CONSUMERS ENERGY COMPANY FINANCING VI
               (Exact name of obligor as specified in its charter)


Delaware                                                     To Be Applied For
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


212 West Michigan Avenue
Jackson, Michigan                                            49201
(Address of principal executive offices)                     (Zip code)

                                  -------------

                           Trust Preferred Securities
                       (Title of the indenture securities)

================================================================================

<PAGE>


1.   GENERAL INFORMATION.  FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

     (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
         IT IS SUBJECT.

     ---------------------------------------------------------------------------
                  Name                                        Address
     ---------------------------------------------------------------------------

     Superintendent of Banks of the          2 Rector Street, New York,
     State of New York                       N.Y.  10006, and Albany, N.Y. 12203

     Federal Reserve Bank of New York        33 Liberty Plaza, New York,
                                             N.Y.  10045

     Federal Deposit Insurance Corporation   Washington, D.C.  20429

     New York Clearing House Association     New York, New York   10005

     (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

     Yes.

2.   AFFILIATIONS WITH OBLIGOR.

     IF THE  OBLIGOR  IS AN  AFFILIATE  OF THE  TRUSTEE,  DESCRIBE  EACH SUCH
     AFFILIATION.

     None.

16.  LIST OF EXHIBITS.

     EXHIBITS  IDENTIFIED IN PARENTHESES  BELOW, ON FILE WITH THE COMMISSION,
     ARE INCORPORATED  HEREIN BY REFERENCE AS AN EXHIBIT HERETO,  PURSUANT TO
     RULE  7A-29  UNDER THE TRUST  INDENTURE  ACT OF 1939 (THE  "ACT") AND 17
     C.F.R. 229.10(D).

     1.     A copy of the  Organization  Certificate  of The Bank of New York
            (formerly Irving Trust Company) as now in effect,  which contains
            the  authority  to  commence  business  and a grant of  powers to
            exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
            Form T-1 filed with Registration Statement No. 33-6215,  Exhibits
            1a and 1b to Form  T-1  filed  with  Registration  Statement  No.
            33-21672  and  Exhibit  1 to Form  T-1  filed  with  Registration
            Statement No. 33-29637.)

     4.     A copy of the existing By-laws of the Trustee. (Exhibit 4 to
            Form T-1 filed with Registration Statement No. 33-31019.)

     6.     The consent of the Trustee required by Section 321(b) of the Act.
            (Exhibit 6 to Form T-1 filed with Registration Statement
            No. 33-44051.)

     7.     A copy of the latest report of condition of the Trustee published
            pursuant to law or to the requirements of its supervising or
            examining authority.


                                      -2-

<PAGE>




                                    SIGNATURE





        Pursuant to the  requirements  of the Act, the Trustee,  The Bank of New
York, a corporation  organized  and existing  under the laws of the State of New
York,  has duly caused this  statement of eligibility to be signed on its behalf
by the undersigned,  thereunto duly authorized, all in The City of New York, and
State of New York, on the 20th day of November, 2001.


                                   THE BANK OF NEW YORK



                                   By:       /s/  STACEY POINDEXTER
                                       ------------------------------------
                                       Name:    STACEY POINDEXTER
                                       Title:   ASSISTANT TREASURER





<PAGE>
                                                                   EXHIBIT 25(d)
                                                                       EXHIBIT 7



- --------------------------------------------------------------------------------

                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2001,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.

<TABLE>
<CAPTION>
                                                                                              Dollar Amounts
ASSETS                                                                                          In Thousands
<S>                                                                                           <C>
Cash and balances due from depository
   institutions:
   Noninterest-bearing balances and currency
     and coin.............................................                                        $2,811,275
   Interest-bearing balances..............................                                         3,133,222
Securities:
   Held-to-maturity securities............................                                           147,185
   Available-for-sale securities..........................                                         5,403,923
Federal funds sold and Securities purchased
   under agreements to resell.............................                                         3,378,526
Loans and lease financing receivables:
   Loans and leases held for sale.........................                                            74,702
   Loans and leases, net of unearned
     income...............37,471,621
   LESS: Allowance for loan and
     lease losses............599,061
   Loans and leases, net of unearned
     income and allowance.................................                                        36,872,560
Trading Assets............................................                                        11,757,036
Premises and fixed assets (including
   capitalized leases)....................................                                           768,795
Other real estate owned...................................                                             1,078
Investments in unconsolidated subsidiaries
   and associated companies...............................                                           193,126
Customers' liability to this bank on
   acceptances outstanding................................                                           592,118
Intangible assets.........................................
   Goodwill...............................................                                         1,300,295
   Other intangible assets................................                                           122,143
Other assets..............................................                                         3,676,375
                                                                                                   ---------
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                              <C>
Total assets...........................................                                          $70,232,359
                                                                                                 ===========

LIABILITIES
Deposits:
   In domestic offices.................................                                          $25,962,242
   Noninterest-bearing.......................10,586,346
   Interest-bearing..........................15,395,896
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs............................                                           24,862,377
   Noninterest-bearing..........................373,085
   Interest-bearing..........................24,489,292
Federal funds purchased and securities sold under
   agreements to repurchase............................                                            1,446,874
Trading liabilities....................................                                            2,373,361
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases).......                                                                1,381,512
Bank's liability on acceptances executed and
   outstanding.........................................                                              592,804
Subordinated notes and debentures......................                                            1,646,000
Other liabilities......................................                                            5,373,065
Total liabilities......................................                                          $63,658,235
EQUITY CAPITAL
Common stock...........................................                                            1,135,284
Surplus................................................                                            1,008,773
Retained earnings......................................                                            4,426,033
Accumulated other comprehensive income.................                                                4,034
Other equity capital components........................                                                    0
- --------------------------------------------------------------- ---------------------------------------------
Total equity capital...................................                                            6,574,124
                                                                                                 -----------
Total liabilities and equity capital...................                                          $70,232,359
                                                                                                 ===========
</TABLE>


         I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.

                                                               Thomas J. Mastro,
                                           Senior Vice President and Comptroller

         We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been


<PAGE>

prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true and correct.

                     ----
Thomas A. Renyi          |
Gerald L. Hassell        |
Alan R. Griffith         |                  Directors
                     ----

- --------------------------------------------------------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25.E
<SEQUENCE>21
<FILENAME>k65350ex25-e.txt
<DESCRIPTION>STATEMENT OF ELIGIBILITY OF PREFERRED GUARANTEE
<TEXT>
<PAGE>





                                                                 EXHIBIT (25)(e)
================================================================================
                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) |__|



                              THE BANK OF NEW YORK
               (Exact name of trustee as specified in its charter)

New York                                                  13-5160382
(State of incorporation                                   (I.R.S. employer
if not a U.S. national bank)                              identification no.)

One Wall Street, New York, N.Y.                           10286
(Address of principal executive offices)                  (Zip code)



                            CONSUMERS ENERGY COMPANY
               (Exact name of obligor as specified in its charter)


Michigan                                                  38-2726431
(State or other jurisdiction of                           (I.R.S. employer
incorporation or organization)                            identification no.)


212 West Michigan Avenue
Jackson, Michigan                                         49201
(Address of principal executive offices)                  (Zip code)

                                  -------------

                     Guarantee of Trust Preferred Securities
                     of Consumers Energy Company Financing V
                       (Title of the indenture securities)

================================================================================

<PAGE>


1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

        (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
                  Name                                                    Address
- --------------------------------------------------------------------------------------------------------------
<S>                                                         <C>
        Superintendent of Banks of the State of                           2 Rector Street, New York,
        New York                                                          N.Y. 10006, and Albany, N.Y. 12203

        Federal Reserve Bank of New York                                  33 Liberty Plaza, New York,
                                                                          N.Y. 10045

        Federal Deposit Insurance Corporation                             Washington, D.C. 20429

        New York Clearing House Association                               New York, New York  10005
</TABLE>

        (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

        Yes.

2.      AFFILIATIONS WITH OBLIGOR.

        IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.

        None.

16.     LIST OF EXHIBITS.

        EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
        ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
        RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
        C.F.R. 229.10(D).

        1.     A copy of the Organization Certificate of The Bank of New York
               (formerly Irving Trust Company) as now in effect, which contains
               the authority to commence business and a grant of powers to
               exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
               Form T-1 filed with Registration Statement No. 33-6215, Exhibits
               1a and 1b to Form T-1 filed with Registration Statement No.
               33-21672 and Exhibit 1 to Form T-1 filed with Registration
               Statement No. 33-29637.)

        4.     A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
               T-1 filed with Registration Statement No. 33-31019.)

        6.     The consent of the Trustee required by Section 321(b) of the Act.
               (Exhibit 6 to Form T-1 filed with Registration Statement No.
               33-44051.)

        7.     A copy of the latest report of condition of the Trustee published
               pursuant to law or to the requirements of its supervising or
               examining authority.


                                      -2-
<PAGE>




                                    SIGNATURE



        Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 20th day of November, 2001.


                                   THE BANK OF NEW YORK



                                   By:    /s/ STACEY POINDEXTER
                                       ------------------------------------
                                       Name:  STACEY POINDEXTER
                                       Title: ASSISTANT TREASURER


<PAGE>
                                                                   EXHIBIT 25(e)
                                                                       EXHIBIT 7



- --------------------------------------------------------------------------------

                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2001,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.

<TABLE>
<CAPTION>
                                                                                              Dollar Amounts
ASSETS                                                                                          In Thousands
<S>                                                                                           <C>
Cash and balances due from depository
   institutions:
   Noninterest-bearing balances and currency
     and coin.............................................                                        $2,811,275
   Interest-bearing balances..............................                                         3,133,222
Securities:
   Held-to-maturity securities............................                                           147,185
   Available-for-sale securities..........................                                         5,403,923
Federal funds sold and Securities purchased
   under agreements to resell.............................                                         3,378,526
Loans and lease financing receivables:
   Loans and leases held for sale.........................                                            74,702
   Loans and leases, net of unearned
     income...............37,471,621
   LESS: Allowance for loan and
     lease losses............599,061
   Loans and leases, net of unearned
     income and allowance.................................                                        36,872,560
Trading Assets............................................                                        11,757,036
Premises and fixed assets (including
   capitalized leases)....................................                                           768,795
Other real estate owned...................................                                             1,078
Investments in unconsolidated subsidiaries
   and associated companies...............................                                           193,126
Customers' liability to this bank on
   acceptances outstanding................................                                           592,118
Intangible assets.........................................
   Goodwill...............................................                                         1,300,295
   Other intangible assets................................                                           122,143
Other assets..............................................                                         3,676,375
                                                                                                   ---------
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                              <C>
Total assets...........................................                                          $70,232,359
                                                                                                 ===========

LIABILITIES
Deposits:
   In domestic offices.................................                                          $25,962,242
   Noninterest-bearing.......................10,586,346
   Interest-bearing..........................15,395,896
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs............................                                           24,862,377
   Noninterest-bearing..........................373,085
   Interest-bearing..........................24,489,292
Federal funds purchased and securities sold under
   agreements to repurchase............................                                            1,446,874
Trading liabilities....................................                                            2,373,361
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases).......                                                                1,381,512
Bank's liability on acceptances executed and
   outstanding.........................................                                              592,804
Subordinated notes and debentures......................                                            1,646,000
Other liabilities......................................                                            5,373,065
Total liabilities......................................                                          $63,658,235
EQUITY CAPITAL
Common stock...........................................                                            1,135,284
Surplus................................................                                            1,008,773
Retained earnings......................................                                            4,426,033
Accumulated other comprehensive income.................                                                4,034
Other equity capital components........................                                                    0
- --------------------------------------------------------------- ---------------------------------------------
Total equity capital...................................                                            6,574,124
                                                                                                 -----------
Total liabilities and equity capital...................                                          $70,232,359
                                                                                                 ===========
</TABLE>


         I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.

                                                               Thomas J. Mastro,
                                           Senior Vice President and Comptroller

         We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been


<PAGE>

prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true and correct.

                     ----
Thomas A. Renyi          |
Gerald L. Hassell        |
Alan R. Griffith         |                  Directors
                     ----

- --------------------------------------------------------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25.F
<SEQUENCE>22
<FILENAME>k65350ex25-f.txt
<DESCRIPTION>STATEMENT OF ELIGIBILTY OF THE PREFERRED GUARANTEE
<TEXT>
<PAGE>
                                                                 EXHIBIT (25)(f)
================================================================================

                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) |__|



                              THE BANK OF NEW YORK
               (Exact name of trustee as specified in its charter)

New York                                                 13-5160382
(State of incorporation                                  (I.R.S. employer
if not a U.S. national bank)                             identification no.)

One Wall Street, New York, N.Y.                          10286
(Address of principal executive offices)                 (Zip code)



                            CONSUMERS ENERGY COMPANY
               (Exact name of obligor as specified in its charter)


Michigan                                                 38-2726431
(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                           identification no.)


212 West Michigan Avenue
Jackson, Michigan                                        49201
(Address of principal executive offices)                 (Zip code)

                                  -------------

                     Guarantee of Trust Preferred Securities
                    of Consumers Energy Company Financing VI
                       (Title of the indenture securities)

================================================================================

<PAGE>


1.       GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:

         (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
            Name                                                              Address
- -------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>
        Superintendent of Banks of the State of                           2 Rector Street, New York,
        New York                                                          N.Y.  10006, and Albany, N.Y. 12203

        Federal Reserve Bank of New York                                  33 Liberty Plaza, New York,
                                                                          N.Y.  10045

        Federal Deposit Insurance Corporation                             Washington, D.C.  20429

        New York Clearing House Association                               New York, New York   10005
</TABLE>

        (B)    WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

        Yes.

2.      AFFILIATIONS WITH OBLIGOR.

        IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.

        None.

16.     LIST OF EXHIBITS.

        EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
        ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
        RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
        C.F.R. 229.10(D).

        1.     A copy of the Organization Certificate of The Bank of New York
               (formerly Irving Trust Company) as now in effect, which contains
               the authority to commence business and a grant of powers to
               exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
               Form T-1 filed with Registration Statement No. 33-6215, Exhibits
               1a and 1b to Form T-1 filed with Registration Statement No.
               33-21672 and Exhibit 1 to Form T-1 filed with Registration
               Statement No. 33-29637.)

        4.     A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
               T-1 filed with Registration Statement No. 33-31019.)

        6.     The consent of the Trustee required by Section 321(b) of the Act.
               (Exhibit 6 to Form T-1 filed with Registration Statement
               No. 33-44051.)

        7.     A copy of the latest report of condition of the Trustee published
               pursuant to law or to the requirements of its supervising or
               examining authority.


                                      -2-

<PAGE>

                                    SIGNATURE



        Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 20th day of November, 2001.


                                          THE BANK OF NEW YORK



                                          By:    /s/  STACEY POINDEXTER
                                             ----------------------------------
                                             Name:    STACEY POINDEXTER
                                             Title:   ASSISTANT TREASURER

<PAGE>
                                                                   EXHIBIT 25(f)
                                                                       EXHIBIT 7



- --------------------------------------------------------------------------------

                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2001,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.

<TABLE>
<CAPTION>
                                                                                              Dollar Amounts
ASSETS                                                                                          In Thousands
<S>                                                                                           <C>
Cash and balances due from depository
   institutions:
   Noninterest-bearing balances and currency
     and coin.............................................                                        $2,811,275
   Interest-bearing balances..............................                                         3,133,222
Securities:
   Held-to-maturity securities............................                                           147,185
   Available-for-sale securities..........................                                         5,403,923
Federal funds sold and Securities purchased
   under agreements to resell.............................                                         3,378,526
Loans and lease financing receivables:
   Loans and leases held for sale.........................                                            74,702
   Loans and leases, net of unearned
     income...............37,471,621
   LESS: Allowance for loan and
     lease losses............599,061
   Loans and leases, net of unearned
     income and allowance.................................                                        36,872,560
Trading Assets............................................                                        11,757,036
Premises and fixed assets (including
   capitalized leases)....................................                                           768,795
Other real estate owned...................................                                             1,078
Investments in unconsolidated subsidiaries
   and associated companies...............................                                           193,126
Customers' liability to this bank on
   acceptances outstanding................................                                           592,118
Intangible assets.........................................
   Goodwill...............................................                                         1,300,295
   Other intangible assets................................                                           122,143
Other assets..............................................                                         3,676,375
                                                                                                   ---------
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                              <C>
Total assets...........................................                                          $70,232,359
                                                                                                 ===========

LIABILITIES
Deposits:
   In domestic offices.................................                                          $25,962,242
   Noninterest-bearing.......................10,586,346
   Interest-bearing..........................15,395,896
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs............................                                           24,862,377
   Noninterest-bearing..........................373,085
   Interest-bearing..........................24,489,292
Federal funds purchased and securities sold under
   agreements to repurchase............................                                            1,446,874
Trading liabilities....................................                                            2,373,361
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases).......                                                                1,381,512
Bank's liability on acceptances executed and
   outstanding.........................................                                              592,804
Subordinated notes and debentures......................                                            1,646,000
Other liabilities......................................                                            5,373,065
Total liabilities......................................                                          $63,658,235
EQUITY CAPITAL
Common stock...........................................                                            1,135,284
Surplus................................................                                            1,008,773
Retained earnings......................................                                            4,426,033
Accumulated other comprehensive income.................                                                4,034
Other equity capital components........................                                                    0
- --------------------------------------------------------------- ---------------------------------------------
Total equity capital...................................                                            6,574,124
                                                                                                 -----------
Total liabilities and equity capital...................                                          $70,232,359
                                                                                                 ===========
</TABLE>


         I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.

                                                               Thomas J. Mastro,
                                           Senior Vice President and Comptroller

         We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been


<PAGE>

prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true and correct.

                     ----
Thomas A. Renyi          |
Gerald L. Hassell        |
Alan R. Griffith         |                  Directors
                     ----

- --------------------------------------------------------------------------------



</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
