EX-10.84-2 10 a2056094zex-10_842.txt EXHIBIT 10.84.2 Exhibit 10.84.2 EXECUTION COPY AMENDMENT TWO AMENDMENT TWO (this "AMENDMENT") dated as of May 30, 2001 by and among EDISON MISSION ENERGY (the "BORROWER"), BANK OF AMERICA, N.A., as Administrative Agent (in such capacity, the "ADMINISTRATIVE AGENT") and each of certain commercial lending institutions party hereto (the "LENDERS"). WHEREAS, the Borrower, the Administrative Agent and certain of the Lenders entered into a Credit Agreement dated as of May 30, 2000 (as amended by Amendment One dated as of August 17, 2000 among the Borrower, the Administrative Agent and the Lenders party thereto, the "CREDIT AGREEMENT"); WHEREAS, the Borrower has requested that the Lenders renew their Commitments and extend the Commitment Termination Date to October 10, 2001. ACCORDINGLY, the parties hereto agree as follows: Section 1. DEFINITIONS. Except as otherwise defined in this Amendment, terms defined in the Credit Agreement are used herein (and in the introductions and recitals hereto) as defined therein. Section 2. AMENDMENT TO THE CREDIT AGREEMENT. Subject to the satisfaction of the conditions precedent specified in Section 3 below, but effective as of the Amendment Effective Date, the Credit Agreement shall be amended as follows: (a) SECTION 1.1 of the Credit Agreement shall be amended by deleting the definition of "CHANGE IN CONTROL" in its entirety. (b) SECTION 1.1 of the Credit Agreement shall be amended by deleting CLAUSE (a) of the definition of "COMMITMENT TERMINATION DATE" in its entirety and replacing it with the following: "(a) October 10, 2001 or, if such date has been extended by any Lender pursuant to SECTION 2.6, then, with respect to the Commitment of such Lender, such date as determined pursuant to SECTION 2.6;". (c) SECTION 1.1 of the Credit Agreement shall be amended by adding the following definitions in alphabetical order: ""AMENDMENT EFFECTIVE DATE" shall have the meaning assigned to such term in Section 3 of Amendment Two to this Agreement. "CAPITAL STOCK" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of, or interests in (however designated), the equity of such 2 Person, including, without limitation, all common stock and preferred stock and partnership and joint venture interests of such Person. "CONSOLIDATED NET WORTH" means, at any date, the consolidated stockholders' equity of the Borrower and its Consolidated Subsidiaries determined as of such date without giving effect to any accumulated other comprehensive gain or loss after December 31, 1999 plus, to the extent not otherwise included therein, (a) the liquidation preference at such date of non-redeemable preferred stock of the Borrower and (b) Equity Preferred Securities. "CONSOLIDATED OPERATING PROJECTS" means any electric generation facilities, oil and gas properties, trading activities, and operation and maintenance services in which the Borrower or its Subsidiaries have a direct or indirect ownership greater than 50%. "CONSOLIDATED SUBSIDIARY" means, at any date with respect to any Person, any Subsidiary of such Person or other entity the accounts of which would be consolidated with those of such Person in its consolidated financial statements if such statements were prepared as of such date. "DERIVATIVES OBLIGATIONS" of any Person means all obligations of such Person in respect of any rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of the foregoing transactions) or any combination of the foregoing transactions. For purposes of determining the Recourse Debt to Recourse Capital Ratio on any date, the Derivatives Obligations of the Borrower shall be determined on a "mark to market" basis on such date. "DISTRIBUTIONS" means any interest or principal payments on loans, distributions, management fees and dividends to the Borrower or any of its Subsidiaries made by a Non-Consolidated Operating Project. "EME REVOLVERS" means, collectively, the Credit Agreement, the March Credit Agreement and the October Credit Agreement. "EQUITY PREFERRED SECURITIES" means securities issued by the Borrower (a) that are not subject to mandatory redemption or the underlying securities, if any, of which are not subject to mandatory redemption, (b) that are perpetual or mature no less than 30 years from the date of issuance, (c) the indebtedness issued in connection with which, including any guaranty, is subordinate in right of payment to the unsecured and unsubordinated indebtedness of the issuer of such indebtedness or guaranty, and (d) the terms of which permit AMENDMENT TWO 3 the deferral of payment of interest or distributions thereon to the date occurring after the Commitment Termination Date. "FUNDS FLOW FROM OPERATIONS" means, for any period, Distributions plus Operating Cash Flow plus interest income during such period less Operating Expenses during such period. "INTEREST COVERAGE RATIO" means, for any period, the ratio of (a) Funds Flow from Operations during such period to (b) Interest Expense for such period. "INTEREST EXPENSE" means the accrued interest expense of all the Borrower's senior recourse indebtedness, but shall exclude any intercompany obligation on which interest or the equivalent is received by the Borrower. "MAJOR PROJECTS" means the First Hydro plant, the Loy Yang B plant, the Homer City Generating Station, the plants located in Illinois owned by Midwest Generation, LLC, the Kern River cogeneration facility, the Midway Sunset cogeneration facility, the Watson cogeneration facility and the Sycamore cogeneration facility. "MARCH CREDIT AGREEMENT" means the $595,000,000 Credit Agreement dated as of March 18, 1999 among the Borrower, certain commercial lending institutions party thereto and Citicorp USA, Inc. as the administrative agent. "MIDWEST" means Midwest Generation, LLC. "NET CASH PROCEEDS" means (a) in connection with an asset disposition permitted under SECTION 7.2.7, the cash proceeds received from such asset disposition by the Borrower on an after-tax basis, net of attorney's fees, investment banking fees, accountants' fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith and (b) in connection with any issuance or sale of indebtedness or Capital Stock, the cash proceeds received from such issuance or incurrence on an after-tax basis, net of attorney's fees, investment banking fees, accountants' fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith. "NON-CONSOLIDATED OPERATING PROJECTS" means any electric generation facilities, oil and gas properties, trading activities, and operation and maintenance services in which the Borrower or its Subsidiaries have a direct or indirect ownership equal to or less than 50%. "OCTOBER CREDIT AGREEMENT" means the $425,000,000 Credit Agreement dated as of October 11, 1996 among the Borrower, certain commercial lending institutions party thereto and Bank of America, N.A. (formerly, Bank of America National Trust and Savings Association) as the administrative agent. AMENDMENT TWO 4 "OPERATING CASH FLOW" means, for any period, the excess of accrued Project Revenues during such period less accrued Project Operating Expenses less accrued Project Debt Service during such period from the Consolidated Operating Projects. "OPERATING EXPENSES" means, for any period, all amounts accrued by the Borrower in the conduct of its business during such period, including utilities, general and administrative expenses, employee salaries, wages and other employment-related costs, fees for letters of credit, surety bonds and performance bonds. Operating Expenses do not include federal and state taxes, depreciation or amortization, and other non-cash charges. "POWERTON/JOLIET GUARANTEES" means, collectively, (i) the Guaranty Agreement dated as of August 17, 2000 made by the Borrower in favor of Powerton Trust I that, among other things, guarantees the payment by Midwest of certain liabilities payable to Powerton Trust I, (ii) the Guaranty Agreement dated as of August 17, 2000 made by the Borrower in favor of Powerton Trust II that, among other things, guarantees the payment by Midwest of certain liabilities payable to Powerton Trust II, (iii) the Guaranty Agreement dated as of August 17, 2000 made by the Borrower in favor of Joliet Trust I that, among other things, guarantees the payment by Midwest of certain liabilities payable to Joliet Trust I and (iv) the Guaranty Agreement dated as of August 17, 2000 made by the Borrower in favor of Joliet Trust II that, among other things, guarantees the payment by Midwest of certain liabilities payable to Joliet Trust II. "POWERTON/JOLIET INTERCOMPANY NOTES" means the promissory notes of the Borrower dated as of August 24, 2000 having an aggregate principal amount equal to $1,367,000,000, evidencing in each case a loan from Midwest to the Borrower. "PROJECT DEBT SERVICE" means, for any period, all accrued interest and principal payments during such period for the Consolidated Operating Projects. Any principal payments made due to refinancing shall be excluded. "PROJECT OPERATING EXPENSES" means all accrued expenses by the Consolidated Operating Projects which are necessary for the continued operation and maintenance of the Consolidated Operating Projects which shall include operating lease payments and foreign taxes paid but exclude depreciation and amortization or any capital expenditure undertaken primarily to increase the efficiency of, expand or re-power the Consolidated Operating Projects or capital expenditures for environmental purposes which are not required by applicable law. "PROJECT REVENUES" means, for any period, all accrued revenues by the Consolidated Operating Projects during such period, including revenues from the sale of energy and capacity, steam and fuel plus accruals for business interruption insurance and all interest and other income. AMENDMENT TWO 5 "RECOURSE DEBT" means, on any date, the sum (without duplication) of the following indebtedness of the Borrower: (a) all indebtedness for borrowed money other than Subordinated Debt; (b) all guarantees for (i) indebtedness of the Subsidiaries and (ii) rental expenses of the Subsidiaries; (c) all reimbursement obligations with respect to surety bonds, letters of credit (to the extent not collateralized with cash or Cash Equivalent Investments), bankers' acceptances and similar instruments (in each case, whether or not matured); (d) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses; and (e) Derivative Obligations. For purposes of the foregoing, (i) indebtedness of the Borrower shall exclude, to the extent included, (A) indebtedness of the Borrower evidenced by the Powerton/Joliet Intercompany Notes for so long as amounts payable thereunder are subject to setoff against amounts paid under the Powerton/Joliet Guarantees in accordance with the terms of the Powerton/Joliet Intercompany Notes; (B) indebtedness of the Borrower evidenced by the Synthetic Lease Intercompany Note for so long as amount payable thereunder are subject to setoff against payments under the Synthetic Lease Guarantee in accordance with the terms of the Synthetic Lease Intercompany Note; and (C) indebtedness of the Borrower under guarantees of rental expenses to the extent attributable to lease indebtedness provided by Subsidiaries under leasing transactions, including, without limitation, indebtedness of the Borrower under the Synthetic Lease Guarantee to the extent attributable to lease indebtedness provided by Subsidiaries as Synthetic Lease Tranche A Loans; and (ii) the amount of indebtedness of the Borrower under guarantees of rental expenses of the Subsidiaries on any date of determination shall be the termination value under the related lease on such date of determination (adjusted so as to give effect to adjustments contemplated by clause (i)(C) above, if applicable) plus reasonably anticipated indemnity or other similar payments as of such date of determination; provided that the amount of indebtedness of the Borrower under each Powerton/Joliet Guarantee on any date of determination shall be the Termination Value (or, if applicable, Special Termination Value) as defined in such Powerton/Joliet Guarantee on such date of determination plus reasonably anticipated indemnity or other similar payments as of such date of determination. "RECOURSE DEBT TO RECOURSE CAPITAL RATIO" means, on any date, the ratio of: (a) Recourse Debt on such date to (b) the sum on such date of (i) Consolidated Net Worth on such date PLUS (ii) Recourse Debt. "SYNTHETIC LEASE CREDIT AGREEMENT" means the Credit Agreement dated as of June 23, 2000 among EME/CDL Trust, Midwest Peaker Holdings, Inc., Citicorp Del-Lease, Inc. and Citicorp North America, Inc. "SYNTHETIC LEASE GUARANTEE" means the Guaranty Agreement dated as of June 23, 2000 made by the Borrower in favor of the EME/CDL Trust. "SYNTHETIC LEASE INTERCOMPANY NOTE" means the intercompany AMENDMENT TWO 6 note of the Borrower dated as of July 10, 2000 having a principal amount of $300,000,000, evidencing a loan from Midwest to the Borrower. "SYNTHETIC LEASE TRANCHE A LOANS" means the Tranche A Loans (as defined in the Synthetic Lease Credit Agreement).". (d) SECTION 2.2 of the Credit Agreement shall be amended by deleting Section 2.2 in its entirety and replacing it with the following: "REDUCTION OF THE TOTAL COMMITMENT AMOUNT. (a) The Borrower may, from time to time on any Business Day occurring after the Effective Date, voluntarily reduce the Total Commitment Amount without premium or penalty (subject, however, to SECTION 4.5); PROVIDED, HOWEVER, that all such reductions shall require at least one Business Days' prior notice to the Administrative Agent and be permanent, and any partial reduction of the Total Commitment Amount shall be in a minimum amount of $10,000,000 and in an integral multiple of $1,000,000 in excess thereof; and, PROVIDED, FURTHER, that the Total Commitment Amount may not be reduced to an amount less than the aggregate amount of outstanding Loans; and (b) as of August 15, 2001, in the event that the Total Commitment Amount is greater than $200,000,000, Commitments shall be reduced in an amount equal to the difference between the Total Commitment Amount and $200,000,000.". (e) SECTION 3.1.1 of the Credit Agreement shall be amended by deleting Section 3.1.1(b) in its entirety and replacing it with the following: "(b) the Borrower shall (i) immediately upon any acceleration of any Loans pursuant to SECTION 8.2 or SECTION 8.3, repay all Loans, unless, pursuant to SECTION 8.3, only a portion of all Loans is so accelerated; (ii) within three Business Days following the receipt of proceeds from (A) any sale or other disposition of assets not in the ordinary course of business, make a prepayment of the loans outstanding under the EME Revolvers, pro rata based on the total commitment amounts outstanding under each EME Revolver, in an aggregate amount in total equal to the lesser of (x) 50% of the related Net Cash Proceeds or (y) the aggregate principal amount of the loans under all of the EME Revolvers then outstanding (and the commitments under the EME Revolvers shall automatically be reduced, pro rata based on the total commitment amounts outstanding under the EME Revolvers, by an amount in total equal to 50% of the related Net Cash Proceeds) or (B) the sale or issuance of any Capital Stock or Indebtedness of the Borrower after the Amendment Effective Date, make a prepayment of the loans outstanding under the EME Revolvers, pro rata based on the total commitment amounts outstanding under each EME Revolver, in an aggregate amount in total equal to the lesser of (x) 100% of the related Net Cash Proceeds or (y) the aggregate principal amount of the loans under all of the EME Revolvers then outstanding (and the commitments under the EME Revolvers shall automatically be reduced, pro rata based on the total commitment amounts outstanding under each EME Revolver, by an aggregate amount in total equal to AMENDMENT TWO 7 100% of the related Net Cash Proceeds); PROVIDED, HOWEVER, that the prepayment requirement under this SECTION 3.1.1(b)(ii) shall not be in effect if the Borrower has permanently reduced its outstanding commitments and loans under the EME Revolvers to an amount in the aggregate equal to or less than $850,000,000; and (iii) on August 15, 2001 in the event the Loans outstanding exceed $200,000,000 as of such date, the Borrower shall prepay Loans in an amount equal to the difference between the Loans outstanding on such date and $200,000,000.". (f) SECTION 7.1.1 of the Credit Agreement shall be amended by deleting Section 7.1.1(c) in its entirety and replacing it with the following: "(c) concurrently with the delivery of financial statements referred to in SECTIONS 7.1.1.(a) AND 7.1.1(b), a certificate, executed by the controller, treasurer or chief financial officer of the Borrower, showing (in reasonable detail and with appropriate calculations and computations in all respects satisfactory to the Administrative Agent) compliance with the financial covenants set forth in SECTION 7.2.10 and SECTION 7.2.11.". (g) SECTION 7.2.1 of the Credit Agreement shall be amended by deleting Section 7.2.1(b) in its entirety and replacing it with the following: "(b) (i) Capitalized Lease Liabilities, (ii) other secured Indebtedness of any kind whatsoever existing on the Amendment Effective Date and (iii) after the Amendment Effective Date, other secured Indebtedness, not to exceed $100,000,000 in the aggregate; PROVIDED that any secured Indebtedness exceeding such amount may be secured pursuant to SECTION 7.2.3(f); and". (h) SECTION 7.2.3 of the Credit Agreement shall be amended by deleting Section 7.2.3(f) and replacing it with the following: "(f) Liens upon any property (other than direct or indirect ownership interests of the Borrower in Major Projects, except for those Liens on such ownership interests existing on the Amendment Effective Date) at any time directly owned by the Borrower to secure any Indebtedness of the nature described in CLAUSE (b) of SECTION 7.2.1; and". (i) SECTION 7.2.4 of the Credit Agreement shall be amended by deleting Section 7.2.4 in its entirety and replacing it with the following: "[INTENTIONALLY OMITTED]". (j) SECTION 7.2.6 of the Credit Agreement shall be amended by deleting the parenthetical "(including, without limitation, a Change in Control)" following the word "thereto" in the second line of Section 7.2.6(c) of the Credit Agreement. (k) SECTION 7.2 of the Credit Agreement shall be amended by adding the following sections: AMENDMENT TWO 8 "Section 7.2.10 INTEREST COVERAGE. The Borrower will at the end of each of its fiscal quarters maintain an Interest Coverage Ratio for the immediately preceding four consecutive fiscal quarters of the Borrower of not less than 1.50 to 1.00. Section 7.2.11 RECOURSE DEBT TO RECOURSE CAPITAL RATIO. The Borrower will at the end of each of its fiscal quarters maintain a Recourse Debt to Recourse Capital Ratio of not more than 0.675 to 1.00.". (l) SECTION 8.1.5 of the Credit Agreement shall be amended by deleting Section 8.1.5 in its entirety and replacing it with the following: "DEFAULT ON OTHER INDEBTEDNESS. (i) A default shall occur in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any Indebtedness of the Borrower or (ii) a default shall occur in the performance or observance of any obligation or condition with respect to such Indebtedness (other than the EME Revolvers) if the effect of such default is to accelerate the maturity of any such Indebtedness or such default shall continue unremedied for any applicable period of time sufficient to permit the holder or holders of such Indebtedness, or any trustee or agent for such holders, to cause such Indebtedness to become due and payable prior to its expressed maturity, in either case, such default having a principal amount, individually or in the aggregate, in excess of $20,000,000 (other than Indebtedness described in SECTION 8.1.1) or (iii) a default shall occur in the performance or observance of any obligation or condition with respect to any of the EME Revolvers (subject to any applicable grace period).". (m) SECTION 8.1.8 of the Credit Agreement shall be amended by deleting Section 8.1.8 in its entirety and replacing it with the following: "[INTENTIONALLY OMITTED]". (n) ANNEX I of the Credit Agreement shall be deleted and replaced in its entirety with Exhibit A hereto. Section 3. CONDITIONS PRECEDENT. This Amendment shall not become effective until the date (the "AMENDMENT EFFECTIVE DATE") on which each of the following conditions precedent have been satisfied or will be satisfied contemporaneously with this Amendment becoming effective: (a) Delivery to the Administrative Agent of this Amendment duly executed and delivered by the Borrower, the Administrative Agent and each of the Lenders; (b) The Administrative Agent shall have received opinions, dated the Amendment Effective Date and addressed to the Administrative Agent and the Lenders from (i) the in-house counsel to the Borrower and (ii) the special California counsel to the AMENDMENT TWO 9 Borrower. Each such opinion shall be in form and substance reasonably satisfactory to the Administrative Agent; (c) Delivery to the Administrative Agent of a certificate, executed by the controller, treasurer or chief financial officer of the Borrower, showing (in reasonable detail and with appropriate calculations and computations in all respects satisfactory to the Administrative Agent) compliance with the financial covenants set forth in SECTION 7.2.10 and SECTION 7.2.11 as of the Amendment Effective Date; (d) The representations and warranties of the Borrower as set forth in the Credit Agreement shall be true and correct as of the Amendment Effective Date after giving effect to the amendments contemplated hereby (unless stated to be given as of an earlier date, in which case such representation and warranty shall be true and correct only as of such earlier date and except as set forth in the Borrower's Form 10-K for the fiscal year ended December 31, 2000 and the Borrower's Form 10-Q for the first quarter of 2001); (e) As of the Amendment Effective Date, no Default shall have occurred and be continuing after giving effect to this Amendment; (f) Amendment Three to the March Credit Agreement will become effective pursuant to the terms and conditions thereof contemporaneously with this Amendment; and (g) Delivery to the Lenders of a Supplemental Agreement duly executed and delivered by the Borrower, the Administrative Agent and the other intended parties, substantially in the form heretofore furnished to the Lenders (and the Lenders hereby authorize the Administrative Agent to execute such Supplemental Agreement). Section 4. MISCELLANEOUS. Except as expressly amended hereby, all of the terms and provisions of the Credit Agreement are and shall remain in full force and effect. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Amendment by signing any such counterpart. This Amendment shall be governed by, and construed in accordance with, the law of the State of California. AMENDMENT TWO S-1 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their respective officers thereunto duly authorized. EDISON MISSION ENERGY By: /s/ G. Gary Garcia ------------------------------------------ Name: G. Gary Garcia Title: Treasurer BANK OF AMERICA, N.A., as Administrative Agent and Lender By: /s/ Timothy C. Hintz ------------------------------------------ Name: Timothy C. Hintz Title: Managing Director BARCLAYS BANK PLC By: /s/ Sydney G. Dennis ------------------------------------------ Name: Sydney G. Dennis Title: Director KBC BANK N.V. By: /s/ Jean-Pierre Diels /s/ Robert Snauffer ------------------------------------------ Name: Jean-Pierre Diels Robert Snauffer Title: First Vice President First Vice President TORONTO DOMINION (TEXAS) INC. By: /s/ Mark A. Baird ------------------------------------------ Name: Mark A. Baird Title: Vice President AMENDMENT TWO S-2 UNICREDITO ITALIANO By: /s/ Gianfranco Bisagni /s/ Saiyed A. Abbas ------------------------------------------- Name: Gianfranco Bisagni Saiyed A. Abbas Title: First Vice President Vice President WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH By: /s/ Jasjeet S. Sood ------------------------------------------- Name: Jasjeet S. Sood Title: Managing Director and Head of Energy Group By: /s/ Jonathan Berman ------------------------------------------- Name: Jonathan Berman Title: Managing Director AMENDMENT TWO EXHIBIT A EDISON MISSION ENERGY PRICING GRID
============================================================================================= LEVEL 1 LEVEL 2 BASIS FOR PRICING LT Senior Unsecured Debt Rated LT Senior Unsecured Debt Rated At Least BBB By S&P AND Baa2 Less Than Level 1 But At Least By Moody's. BBB- By S&P AND Baa3 By Moody's. ============================================================================================= APPLICABLE MARGIN (BASE 50.00 bps 75.00 bps RATE LOANS) --------------------------------------------------------------------------------------------- APPLICABLE MARGIN (LIBO 150.00 bps 287.50 bps RATE LOANS) ============================================================================================= FACILITY FEE (1) 25.00 bps 37.50 bps --------------------------------------------------------------------------------------------- DRAWN COST (2) LIBOR + 175.00 bps LIBOR + 325.00 bps Base Rate + 75.00 bps Base Rate + 112.50 bps --------------------------------------------------------------------------------------------- ============================================================================================== LEVEL 3 LEVEL 4 BASIS FOR PRICING LT Senior Unsecured Debt Rated LT Senior Unsecured Debt Rated Less Than Level 2 But At Least Lower Than Level 3. BB+ By S&P AND Ba1 By Moody's. ============================================================================================== APPLICABLE MARGIN (BASE 100.00 bps 150.00 bps RATE LOANS) ---------------------------------------------------------------------------------------------- APPLICABLE MARGIN (LIBO 325.00 bps 400.00 bps RATE LOANS) ============================================================================================== FACILITY FEE (1) 50.00 bps 50.00 bps ---------------------------------------------------------------------------------------------- DRAWN COST (2) LIBOR + 375.00 bps LIBOR + 450.00 bps Base Rate + 150.00 bps Base Rate + 200.00 bps ----------------------------------------------------------------------------------------------
(1) Paid quarterly in arrears on each bank's commitment irrespective of usage. (2) Facility Fee plus Applicable Margin. bps = basis points per annum AMENDMENT TWO