EXHIBIT 4(j)(ii)
AMENDMENT NO. 3
TO
$450,000,000 CREDIT AGREEMENT
This AMENDMENT NO. 3, dated as of February 28, 2002 (this "AMENDMENT"),
is by and among CMS Energy Corporation (the "BORROWER"), the financial
institutions parties thereto as "lenders" (the "LENDERS"), Barclays Bank PLC, as
administrative agent (in such capacity, the "ADMINISTRATIVE AGENT"), and as
collateral agent (in such capacity, the "COLLATERAL AGENT"), Bank of America,
N.A. and The Chase Manhattan Bank, as co-syndication agents (the "CO-SYNDICATION
AGENTS"), and Citibank, N.A. and Union Bank of California, as documentation
agents (the "DOCUMENTATION AGENTS").
WHEREAS, the Borrower, the Lenders, the Administrative Agent, the
Collateral Agent, the Co-Syndication Agents and the Documentation Agents have
entered into a $450,000,000 Credit Agreement, dated as of June 18, 2001 (as
amended, restated, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"; capitalized terms not defined herein are used as defined in
the Credit Agreement);
WHEREAS, the Borrower acknowledges that (a) the ratio of Consolidated
Debt to Consolidated EBITDA for the four-fiscal-quarter period ending on
December 31, 2001 is currently estimated to have been approximately 5.42 to 1,
in breach of the covenant set forth in Section 8.01(i) of the Credit Agreement,
and (b) pursuant to Section 9.01(c) of the Credit Agreement, the breach of this
covenant constitutes an Event of Default (the "Identified Event of Default")
under the Credit Agreement;
WHEREAS, the Borrower acknowledges that (a) with respect to the
reporting period of March 31, 2002, the ratio of (i) the sum of (A) Cash
Dividend Income for the four-fiscal-quarter period ending on December 31, 2001,
plus (B) 25% of the amount of Equity Distributions received by the Borrower
during such period, plus (C) all amounts received by the Borrower from its
Subsidiaries and Affiliates during such period constituting reimbursement of
interest expense paid by the Borrower to (ii) interest expense accrued by the
Borrower during such period, is currently estimated to have been approximately
1.18 to 1, (b) such ratio would, with the lapse of time, constitute a breach of
the covenant set forth in Section 8.01(j) of the Credit Agreement, and (c)
pursuant to Section 9.01(c) of the Credit Agreement, the breach of this covenant
would constitute an Event of Default (the "Identified Default") under the Credit
Agreement; and
WHEREAS, the Borrower, the Lenders, the Administrative Agent, the
Collateral Agent, the Co-Syndication Agents and the Documentation Agents have
agreed to amend the Credit Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises set forth above, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Borrower, the Lenders, the Administrative Agent,
the Collateral Agent, the Co-Syndication Agents and the Documentation Agents
agree as follows:
1. AMENDMENTS TO THE CREDIT AGREEMENT. Subject to the conditions set
forth in paragraph 2 hereof, the Credit Agreement is, effective as of the date
hereof, hereby amended as follows: (a) Section 8.01(i) of the Credit Agreement
is amended by deleting the table appearing at the end thereof and substituting
therefor:
PERIOD RATIO
----------------- -----------
Closing Date through September 30, 2001 5.25 to 1
October 1, 2001 through September 30, 2002 5.50 to 1
October 1, 2002 through March 31, 2003 4.75 to 1
April 1, 2003 and thereafter 4.50 to 1
(b) Section 8.01(j) of the Credit Agreement is amended by deleting such
Section in its entirety and substituting therefor:
"(j) Cash Dividend Coverage Ratio. The Borrower shall
maintain, as of the last day of each Measurement Quarter, a
minimum ratio of (i) the sum of (A) Cash Dividend Income for
the four-fiscal-quarter period ending on such day (or, with
respect to each Measurement Quarter ending in 2002, for the
period from January 1, 2002 through and including the last day
of 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 not less
than : (a) for each such period ending on March 31, 2002, June
30, 2002 and September 30, 2002, 1.40 to 1, (b) for the period
ending on December 31, 2002, 1.50 to 1, (c) for the period
ending on March 31, 2003, 1.75 to 1, and (d) for each such
period ending on June 30, 2003 and thereafter, 1.90 to 1;
provided, that the Borrower shall be deemed not to be in
breach of the foregoing covenant if, during the Measurement
Quarter, it has 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 provided further, that
until the Borrower so reduces such Commitments and principal
amount outstanding under this Agreement and the
2
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)."
2. CONDITIONS TO EFFECTIVENESS. The amendments contemplated by this
Amendment shall become effective upon the execution and delivery to the
Administrative Agent of counterparts hereof by the Required Lenders, the
Administrative Agent and the Borrower and the fulfillment of the following
conditions:
(a) All representations and warranties contained in this Amendment
and in the Credit Agreement and the other Loan Documents, in each case
as amended hereby, shall be true and correct in all material respects.
(b) With the exception of the Identified Event of Default and the
Identified Default, no event shall have occurred and be continuing
which constitutes an Event of Default or a Default.
3. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS. On and after the
effective date of this Amendment, each reference in the Credit Agreement to
"this Agreement", "hereunder", "hereof" or words of like import referring to the
Credit Agreement shall mean and be a reference to the Credit Agreement, as
amended by this Amendment, and each reference in the other Loan Documents to
"the Credit 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 by this Amendment. 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.
Without limiting the generality of the foregoing, the Cash Collateral Agreement
and all of the Collateral described therein do and shall continue to secure the
payment of all obligations of Borrower described therein after giving effect to
this Amendment.
4. MISCELLANEOUS.
(a) Reference to and Effect on the Credit Agreement. The Borrower
reaffirms and restates the representations and warranties set forth in
the Credit Agreement and the other Loan Documents, and all such
representations and warranties shall be true and correct on the date
hereof with the same force and effect as if made on such date. The
Borrower represents and warrants (which representations and warranties
shall survive the execution and delivery hereof) that:
(i) It is a duly organized, validly existing corporation in good
standing under the laws of its organization and has the corporate
power and authority to execute, deliver and carry out the terms and
provisions of this Amendment and has taken or caused to be taken all
necessary corporate action to authorize the execution, delivery and
performance of this Amendment;
(ii) No consent of any other person, including, without
limitation, shareholders or creditors of the Borrower, and no action
of, or filing with any governmental or public body or authority, is
required to authorize, or is otherwise
3
required in connection with the execution, delivery and performance
of this Amendment;
(iii) This Amendment has been duly executed and delivered by a
duly authorized officer on behalf of the Borrower, and constitutes
its legal, valid and binding obligations, enforceable in accordance
with its terms, except as enforcement thereof may be subject to the
effect of any applicable (i) bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally and
(ii) general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law); and
(iv) The execution, delivery and performance of this Amendment
will not violate any law, statue or regulation applicable to the
Borrower or any order or decree of any court or governmental
instrumentality applicable to it, or conflict with, or result in the
breach of, or constitute a default under, any of its contractual
obligations.
(b) No Waiver. Nothing herein contained shall constitute a waiver or
be deemed to be a waiver, of any existing Defaults or Events of
Default, and the Lenders and the Agent reserve all rights and remedies
granted to them by the Credit Agreement, by the other Loan Documents,
by law and otherwise.
(c) Costs and Expenses. The Borrower agrees to pay all costs, fees,
and out-of-pocket expenses (including attorneys' fees) incurred by the
Administrative Agent in connection with the preparation, execution and
enforcement of this Amendment.
(d) Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of
this Amendment for any other purpose.
(e) Counterparts. This Amendment may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement. Delivery of an executed counterpart of a
signature page to this Amendment by facsimile shall be effective as
delivery of a manually executed counterpart of this Amendment.
(f) GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE
OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES).
[signature pages follow]
4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
CMS ENERGY CORPORATION
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X Xxxxxx
Title: Executive Vice President, Chief Financial
Officer and Chief Administrative Officer
BARCLAYS BANK PLC, individually as a Lender and as
Administrative Agent, Collateral Agent and Issuing Bank
By: /s/ Sydney X. Xxxxxx
------------------------
Name: Sydney X. Xxxxxx
Title: Director
5
