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EXHIBIT (10)(a)
[EXECUTION COPY]
AMENDMENT NO. 3 TO
CREDIT AGREEMENT
This AMENDMENT NO. 3, dated as of June 22, 1999, is made by and among
CMS ENERGY CORPORATION, a Michigan corporation (the "BORROWER"), the lenders
parties to the Credit Agreement referred to below (the "LENDERS"), THE CHASE
MANHATTAN BANK, as administrative agent (the "ADMINISTRATIVE AGENT"),
documentation agent (the "DOCUMENTATION AGENT"), collateral agent (the
"COLLATERAL AGENT") and syndication agent (the "SYNDICATION AGENT") for the
Lenders, and the Co-Agents (the "CO-AGENTS") and Lead Managers (the "LEAD
MANAGERS") named therein.
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders, the Administrative Agent, the
Documentation Agent, the Collateral Agent, the Syndication Agent, the Co-Agents
and the Lead Managers have entered into a Credit Agreement, dated as of July 2,
1997, as amended by Amendment No. 1, dated as of January 30, 1998, and Amendment
No. 2, dated as of November 5, 1998 (as so amended, the "CREDIT AGREEMENT").
Unless otherwise defined herein, the terms defined in the Credit Agreement shall
be used herein as therein defined.
(2) The Borrower has requested amendments to the consolidated leverage
ratio and the cash dividend coverage ratio set forth in Section 8.01(i) and
Section 8.01(j), respectively, of the Credit Agreement, and certain other
amendments to the Credit Agreement. The Lenders have agreed to the Borrower's
request, upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is,
effective as of the date hereof (subject to the satisfaction of the conditions
precedent set forth in Section 2 hereof), hereby amended as follows:
(a) Section 8.01(i) of the Credit Agreement is amended in full to read
as follows:
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(i) Consolidated Leverage Ratio. The Borrower shall maintain
at all times a ratio of Consolidated Debt to Consolidated Capital of
not more than the amount set forth below during each corresponding
period set forth below:
PERIOD AMOUNT
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Closing Date through 0.68:1.0
June 30, 1998
July 1, 1998 through 0.67:1.0
November 30, 1998
December 1, 1998 through 0.745:1.0
June 21, 1999
June 22, 1999 through 0.75:1.0
June 30, 2000
July 1, 2000 through 0.63:1.0
June 30, 2001
Thereafter 0.60.1.0
(b) Section 8.01(j) of the Credit Agreement is amended in full to read
as follows:
(j) Cash Dividend Coverage Ratio. The Borrower shall maintain,
as of the last day of each fiscal quarter (in each case, the
"MEASUREMENT QUARTER"), a ratio of (i) the sum of (A) Cash Dividend
Income for the immediately preceding four-fiscal-quarter period ending
on the last day of the fiscal quarter immediately preceding such
Measurement Quarter, plus (B) 25% of the amount of Equity Distributions
received by the Borrower during such period but in no event in excess
of $10,000,000, plus (C) all amounts received by the Borrower from its
Subsidiaries and Affiliates during such period constituting
reimbursement of interest expense (including commitment, guaranty and
letter of credit fees) paid by the Borrower on behalf of any such
Subsidiary or Affiliate to (ii) interest expense (including commitment,
guaranty and letter of credit fees) accrued by the Borrower in respect
of all Debt during such period of (1) not less than 2.1 to 1.0 for each
such period from the Closing Date until (and including) the fiscal
quarter ending December 31, 1998, (2) not less than 1.9 to 1 for each
such period from January 1, 1999 until (and including) the fiscal
quarter ending June 30, 1999, (3) not less than 1.5 to 1 for each such
period from July 1, 1999 until (and including) the fiscal quarter
ending March 31, 2000, and (4) not less than 2.0 to 1.0 thereafter;
provided, that
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the Borrower shall be deemed not to be in breach of the foregoing
covenant if, during the Measurement Quarter, it has (I) permanently
reduced the Commitments and the principal amount outstanding under this
Agreement and the Promissory Notes such that the amount determined
pursuant to clause (ii) above, when recalculated on a pro forma basis
assuming that the amount of such reduced Commitments and principal
amount outstanding under this Agreement and the Promissory Notes were
in effect at all times during such four-fiscal-quarter period, would
result in the Borrower being in compliance with such ratio, and/or (II)
increased Cash Dividend Income during such Measurement Quarter such
that the ratio of (x) Cash Dividend Income for the four-fiscal-quarter
period ending on the last day of the Measurement Quarter to (y) the
amount determined pursuant to clause (ii) above (as recalculated
pursuant to clause (I) above), equals or exceeds (1) 2.1 to 1.0 for
each such period from the Closing Date until (and including) the fiscal
quarter ending December 31, 1998, (2) 1.9 to 1 for each such period
from January 1, 1999 until (and including) the fiscal quarter ending
June 30, 1999, (3) 1.5 to 1 for each such period from July 1, 1999
until (and including) the fiscal quarter ending March 31, 2000, and (4)
2.0 to 1.0 thereafter; and provided further, that until the Borrower so
reduces such Commitments and principal amount outstanding under this
Agreement and the Promissory Notes and/or increases Cash Dividend
Income during such Measurement Quarter, the Borrower may not request
any additional Extensions of Credit (other than Conversions).
(c) Section 8.03 of the Credit Agreement is amended by deleting the
phrase "the Borrower will, unless the Required Lenders shall otherwise consent
in writing, furnish to each Lender" in its entirety and substituting therefor
the new phrase "the Borrower will, unless the Required Lenders shall otherwise
consent in writing, furnish to the Administrative Agent (with sufficient copies
for each Lender)".
(d) Section 8.03(k) of the Credit Agreement is amended by deleting the
phrase "and copies of all final prospectuses" in its entirety and substituting
therefor the new phrase "and notice to the Administrative Agent of any sending
or filing of, and (upon the request of any Agent or Lender) copies of, final
prospectuses".
SECTION 2. CONDITIONS OF EFFECTIVENESS. The amendments to the Credit
Agreement contained in Section 1 hereof shall become effective when, and only
when, the Administrative Agent shall have received (a) counterparts of this
Amendment executed by the Borrower and the Required Lenders, (b) evidence, in
form and substance satisfactory to the Administrative Agent, that the Letter of
Credit and Reimbursement Agreement, dated as of September 11, 1997, as amended,
among the Borrower, Bank of America National Trust and Savings Association, as
Administrative Agent and Letter of Credit Issuing Bank, and the other financial
institutions party thereto, has been amended in a manner substantially similar
to the amendments contained in Section 1 hereof, and (c) evidence, in form and
substance satisfactory to the Administrative Agent, that the
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Letter of Credit Reimbursement Agreement, dated March 20, 1996, among the
Borrower, The Chase Manhattan Bank, as Administrative Agent, and the other
financial institutions party thereto, has been amended in a manner substantially
similar to the amendments contained in Section 1 hereof.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower
represents and warrants as follows:
(a) The execution, delivery and performance by the Borrower of this
Amendment, and the performance by the Borrower of the Credit Agreement, as
amended by this Amendment, (i) are within the Borrower's corporate powers, (ii)
have been duly authorized by all necessary corporate action and (iii) do not and
will not (A) require any consent or approval of the stockholders of the
Borrower, (B) violate any provision of the charter or by-laws of the Borrower or
of law, (C) violate any legal restriction binding on or affecting the Borrower,
(D) result in a breach of, or constitute a default under, any indenture or loan
or credit agreement or any other agreement, lease or instrument to which the
Borrower is a party or by which it or its properties may be bound or affected,
or (E) result in or require the creation of any Lien (other than pursuant to the
Loan Documents) upon or with respect to any of its properties.
(b) No Governmental Approval is required for the due execution,
delivery and performance by the Borrower of this Amendment or for the
performance by the Borrower of the Credit Agreement, as amended by this
Amendment.
(c) This Amendment and the Credit Agreement, as amended by this
Amendment, are the legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective terms;
subject to the qualification, however, that the enforcement of the rights and
remedies herein and therein is subject to bankruptcy and other similar laws of
general application affecting rights and remedies of creditors and the
application of general principles of equity (regardless of whether considered in
a proceeding in equity or at law). This Amendment has been duly executed and
delivered on behalf of the Borrower.
(d) The representations and warranties of the Borrower set forth in
Section 7.01 of the Credit Agreement are true and correct on and as of the date
hereof, as though made on and as of such date.
(e) No event has occurred and is continuing that constitutes a Default
or an Event of Default.
SECTION 4. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS. (a) Upon the
effectiveness of this Amendment, on and after the date hereof each reference in
the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to "the Credit
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Agreement", "thereunder", "thereof" or words of like import referring to the
Credit Agreement, shall mean and be a reference to the Credit Agreement as
amended hereby.
(b) Except as specifically amended above, the Credit Agreement and all
other Loan Documents are and shall continue to be in full force and effect and
are hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender or the Agents under any of the Loan Documents, nor
constitute a waiver of any provision of any of the Loan Documents.
SECTION 5. EXECUTION IN COUNTERPARTS. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement. Delivery of an executed counterpart of a signature page of this
Amendment by facsimile transmission shall be as effective as delivery of a
manually executed counterpart of this Amendment.
SECTION 6. GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
CMS ENERGY CORPORATION
By /s/ Alan M. Wright
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Name: Alan M. Wright
Title: Senior Vice President and
Chief Financial Officer
THE CHASE MANHATTAN BANK, as
Administrative Agent, Collateral Agent,
Documentation Agent and Syndication Agent
By /s/ Thomas L. Casey
---------------------------------------
Name: Thomas L. Casey
Title: Vice President
LENDERS
THE CHASE MANHATTAN BANK
By /s/ Thomas L. Casey
------------------------------------
Name: Thomas L. Casey
Title: Vice President
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ABN AMRO BANK N.V.
By /s/ Peter D. Gaw
------------------------------------
Name: Peter D. Gaw
Title: Senior Vice President
& Managing Director
By /s/ Robert E. Lee IV
------------------------------------
Name: Robert E. Lee IV
Title: Assistant Vice President
BANK OF AMERICA ILLINOIS
By /s/ Gretchen P. Burud
------------------------------------
Name: Gretchen P. Burud
Title: Principal
NATIONSBANK, N.A.
By /s/ Gretchen P. Burud
------------------------------------
Name: Gretchen P. Burud
Title: Principal
BANKBOSTON, N.A.
By /s/ Thomas E. O'Leary
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Name: Thomas E. O'Leary
Title: Director Executive
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BARCLAYS BANK PLC
By /s/ Sydney G. Dennis
------------------------------------
Name: Sydney G. Dennis
Title: Director
DRESDNER BANK AG, NEW YORK
AND GRAND CAYMAN BRANCHES
By /s/ Michael E. Higgins
------------------------------------
Name: Michael E. Higgins
Title: Vice President
By /s/ Robert Preminger
------------------------------------
Name: Robert Preminger
Title: Assistant Vice President
NATIONAL AUSTRALIA BANK LIMITED
By /s/ Jeff D. White
------------------------------------
Name: Jeff D. White
Title: Vice President
THE SUMITOMO BANK, LIMITED,
CHICAGO BRANCH
By /s/ John H. Kemper
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Name: John H. Kemper
Title: Senior Vice President
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BANK OF MONTREAL
By /s/ Howard H. Turner
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Name: Howard H. Turner
Title: Director
THE BANK OF NEW YORK
By /s/ John N. Watt
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Name: John N. Watt
Title: Vice President
BANK OF SCOTLAND
By /s/ Annie Glynn
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Name: Annie Glynn
Title: Senior Vice President
BANQUE PARIBAS
By /s/ Dan Cozine By /s/ Ralph Scholtz
------------------------------------ --------------------------------
Name: Dan Cozine Name: Ralph Scholtz
Title: Director Title: Director
COMERICA BANK
By /s/ David C. Bird
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Name: David C. Bird
Title: Vice President
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CREDIT LYONNAIS CHICAGO BRANCH
By /s/ Mary Ann Klemm
------------------------------------
Name: Mary Ann Klemm
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By /s/ Walter R. Wolff
------------------------------------
Name: Walter R. Wolff
Title: Joint General Manager
MICHIGAN NATIONAL BANK
By /s/ Mark S. Aben
------------------------------------
Name: Mark S. Aben
Title: Sr. Relationship Manager
THE MITSUBISHI TRUST AND
BANKING CORPORATION, LOS
ANGELES AGENCY
By /s/ Yasushi Satomi
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Name: Yasushi Satomi
Title: Senior Vice President
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SOCIETE GENERALE, CHICAGO BRANCH
By /s/ Jose A. Moreno
------------------------------------
Name: Jose A. Moreno
Title: Director
TORONTO DOMINION (TEXAS), INC.
By /s/ Alva J. Jones
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Name: Alva J. Jones
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By /s/ David Musicant
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Name: David Musicant
Title: Vice President
AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED
By /s/ Elizabeth M. Waters
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Name: Elizabeth M. Waters
Title: Vice President
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THE BANK OF NOVA SCOTIA
By /s/ F.C.H. Ashby
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Name: F.C.H. Ashby
Title: Senior Manager Loan Operations
BANQUE NATIONALE DE PARIS
By /s/ Jo Ellen Bender
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Name: Jo Ellen Bender
Title: Senior Vice President
BHF-BANK AKTIENGESELLSCHAFT
By /s/ Eric Emmert
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Name: Eric Emmert
Title: Associate
By /s/ Geoffrey C. Gavin
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Name: Geoffrey C. Gavin
Title: Assistant Vice President
CHANG HWA COMMERCIAL BANK,
LTD., NEW YORK BRANCH
By /s/ Wan-Tu Yeh
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Name: Wan-Tu Yeh
Title: Vice President and General Manager
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CIBC INC.
By /s/ Denis P. O'Meara
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Name: Denis P. O'Meara
Title: Executive Director
CIBC World Markets Corp. as Agent
CITIBANK, N.A.
By /s/ J. Nicholas McKee
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Name: J. Nicholas McKee
Title: Vice President
THE FIRST NATIONAL BANK OF
CHICAGO
By /s/ Jane Bek
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Name: Jane Bek
Title: Vice President
MELLON BANK, N.A.
By /s/ Richard A. Matthews
------------------------------------
Name: Richard A. Matthews
Title: Vice President
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NATIONAL WESTMINSTER BANK PLC
By /s/ Maria Amaral-LeBlanc
------------------------------------
Name: Maria Amaral-LeBlanc
Title: Vice President
THE ROYAL BANK OF SCOTLAND PLC
By /s/ Scott Barton
------------------------------------
Name: Scott Barton
Title: Vice President
THE SAKURA BANK, LIMITED
By
------------------------------------
Name:
Title:
THE SANWA BANK, LIMITED,
CHICAGO BRANCH
By /s/ Kenneth C. Eichwald
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Name: Kenneth C. Eichwald
Title: First Vice President and
Assistant General Manager
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THE SUMITOMO TRUST & BANKING
CO., LTD., NEW YORK BRANCH
By /s/ Stephen A. Stratico
------------------------------------
Name: Stephen A. Stratico
Title: Vice President
UBS AG, NEW YORK BRANCH (as successor to
Union Bank of Switzerland, New York Branch)
By /s/ Paul R. Morrison
------------------------------------
Name: Paul R. Morrison
Title: Executive Director
By /s/ Andrew N. Taylor
------------------------------------
Name: Andrew N. Taylor
Title: Associate Director
FIRST COMMERCIAL BANK
(INCORPORATED IN TAIWAN,
R.O.C.), LOS ANGELES BRANCH
By /s/ June Shiong Lu
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Name: June Shiong Lu
Title: Senior Vice President and General Manager
THE FUJI BANK, LIMITED
By /s/ Peter L. Chinnici
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Name: Senior Vice President and Group Head
Title:
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ARAB AMERICAN BANK
By /s/ Carmelo L. Foti
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Name: Carmelo L. Foti
Title: Vice President
By /s/ William C. Reynolds
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Name: William C. Reynolds
Title: Vice President
NATIONAL CITY BANK
By /s/ Kenneth R. Ehrhardt
------------------------------------
Name: Kenneth R. Ehrhardt
Title: Vice President