Exhibit 99.2
AMENDMENT NO. 2 TO THIRD AMENDED
AND RESTATED
CREDIT AND REIMBURSEMENT AGREEMENT
Dated as of June
, 2005
AMENDMENT NO. 2 TO THIRD AMENDED AND
RESTATED CREDIT AND REIMBURSEMENT AGREEMENT (this “
Amendment ”) among The AES Corporation, a Delaware
corporation (the “ Borrower ”), the Subsidiary
Guarantors, the Bank Parties, CITICORP USA, INC., as administrative
agent (the “ Agent ”) and CITIBANK, N.A., as
Collateral Agent, for the Bank Parties (the “ Collateral
Agent ”).
PRELIMINARY
STATEMENTS
(1)
WHEREAS, the Borrower is party to a Third Amended and Restated
Credit and Reimbursement Agreement dated as of March 17, 2004 (as
amended by Amendment No. 1 dated as of August 10, 2004 and as
otherwise amended, amended and restated, supplemented or otherwise
modified up to the date hereof, the “ Credit Agreement
”; capitalized terms used herein but not defined shall be
used herein as defined in the Credit Agreement) among the
Subsidiary Guarantors, the Bank Parties, CITIGROUP GLOBAL MARKETS,
INC., as Lead Arranger and Book Runner, BANC OF AMERICA SECURITIES
LLC, as Lead Arranger and Book Runner and as Co-Syndication Agent
(for the Initial Term Loan Facility), DEUTSCHE BANK SECURITIES
INC., as Lead Arranger and Book Runner (for the Initial Term Loan
Facility), UNION BANK OF CALIFORNIA, N.A., as Co-Syndication Agent
(for the Initial Term Loan Facility) and as Lead Arranger and Book
Runner and as Syndication Agent (for the Revolving Credit
Facility), LEHMAN COMMERCIAL PAPER INC., as Co-Documentation Agent
(for the Initial Term Loan Facility), UBS SECURITIES LLC, as
Co-Documentation Agent (for the Initial Term Loan Facility),
SOCIÉTÉ GÉNÉRALE, as Co-Documentation Agent
(for the Revolving Credit Facility), CREDIT LYONNAISE NEW YORK
BRANCH, as Co-Documentation Agent (for the Revolving Credit
Facility), the Agent and the Collateral Agent;
(2)
WHEREAS, the Borrower has requested that the Bank Parties agree to
amend the Credit Agreement;
(3)
WHEREAS, the Bank Parties have agreed, subject to the terms and
conditions hereinafter set forth, to amend the Credit Agreement in
certain respects as set forth below.
NOW, THEREFORE, in consideration of
the premises and for other good and valuable consideration, the
sufficiency and receipt of all of which is hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION
1.
Amendments to the Credit Agreement . The Credit
Agreement is, effective as of the date hereof and subject to the
satisfaction of the conditions precedent set forth in
Section 2, hereby amended as follows:
(a)
Section 1.01 is amended as follows:
(i) The
following definitions shall be added in alphabetical order to read
as follows:
“ Amendment No. 2
” means Amendment No. 2 to this Agreement, dated as of June
, 2005, among the Borrower, the
Subsidiary Guarantors, the Bank Parties, the Agent and the
Collateral Agent.
“ Amendment No. 2 Effective
Date ” means the date that Amendment No. 2 to this
Agreement becomes effective in accordance with Section 2(a) of
Amendment No. 2.
“ Applicable Revolving
Margin ” means, on any date, the percentage set forth in
the table below based on the ratings assigned to the Facilities on
such date by Moody’s Investors Service, Inc. and Standard
& Poor’s Ratings Services:
|
Rating(Moody’s/S&P)
|
|
Margin
|
|
|
|
|
|
|
|
Ba1 (or higher)/BB+ (or
higher)
|
|
1.50
|
%
|
|
Ba2/BB
|
|
1.75
|
%
|
|
Ba3/BB-
|
|
2.00
|
%
|
|
B1 (or lower)/B+ (or
lower)
|
|
2.50
|
%
|
If the Facilities are rated by only
one such rating agency, the rating of such rating agency shall be
used in determining the Applicable Revolving Margin. If the
Facilities are rated by both such rating agencies and (x) the
ratings differential is one level, the lower rating will apply or
(y) the ratings differential is two levels or more, the midpoint
rating will apply; provided that if there is no midpoint
rating, the lower of the two intermediate ratings surrounding the
midpoint will apply. If the Facilities are not rated by
either of such rating agencies, the Facilities shall be deemed to
be rated one level higher than (i) in the case of
Moody’s Investors Service, Inc., the Borrower’s senior
implied issuer rating and (ii) in the case of Standard &
Poor’s Ratings Services, the Borrower’s corporate
credit rating and, in each case, the rules of the preceding two
sentences shall apply to such deemed ratings. If the
Facilities are not rated (or deemed rated in accordance with the
preceding sentence) by either of such rating agencies, the
Applicable Revolving Margin shall be 2.50%.
“ IPALCO Asset Sale
” has the meaning set forth in Section
2.09(b)(ii).
“ Minimum Ratings
Condition ” means, at any time of determination, that the
Facilities are rated at least Ba1 from Moody’s Investors
Service, Inc. and the corporate credit rating of the Borrower is at
least BB- from Standard & Poor’s Ratings Services, in
each case without any negative outlook.
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“ Permitted Credit
Derivative Transaction ” means any credit derivative
transaction referencing a government, governmental agency or
quasi-governmental agency, sovereign or sovereign agency or a
super- or multi- national agency or any debt obligation issued by
any such entity, in each case to the extent such transaction is not
entered into for speculative purposes.
“ Restricted Payment
” has the meaning set forth in Section 5.09(a).
“ Revolving Credit
Assumption Agreement ” has the meaning set forth in
Section 2.18(d)(ii).
“ Revolving Credit Increase
Date ” has the meaning set forth in Section
2.18(a).
“ Revolving Credit Loan
Commitment Increase ” has the meaning set forth in
Section 2.18(a).
“ Revolving Credit Loan
Increase Commitment Date ” has the meaning set forth in
Section 2.18(b).
(ii)
the definition of “ Adjusted Free Cash Flow ” is deleted in its
entirety.
(iii) The
definition of “ Adjusted Parent Operating Cash Flow
” is
amended by inserting “(including rental expense of the
Borrower)” immediately before the period at the end
thereof.
(iv) The
definition of “ Asset
Sale ” is amended by
replacing the phrase “(other than subsection (iv)
thereof)” with the following “(other than sales of
assets or Equity Interests of, or other Investments in, IPALCO or
any of its Subsidiaries or any Subsidiary Guarantor or Subsidiary
thereof permitted by subsection (iv) thereof)”.
(v)
The definition of “ Banks’ Ratable Share ” is amended and
restated in its entirety to read as follows:
“ Banks’ Ratable
Share ” means, in respect of any Net Cash Proceeds, a
percentage of the Creditors’ Portion equal to a fraction
(x) the numerator of which is the Total Bank Exposure at such
time and (y) the denominator of which is the sum of the Total
Bank Exposure at such time plus the aggregate principal
amount of First Priority Secured Debt, the proceeds of which were
used to permanently reduce Total Bank Exposure.
(vi) The
definition of “ Base
Rate Margin ” is amended and
restated in its entirety to read as follows:
“ Base Rate Margin
” means (i) in respect of the Revolving Credit Loans, a rate
per annum equal to the Applicable Revolving Margin less
1.00%, (ii) in respect of the Initial Term Loans, a rate per annum
equal to 0.75% (subject to the provisions of Section 2.06(f)
hereof), and (iii) in respect of the Incremental Term Loan
Facil-
3
ity, a rate per annum to be agreed
to by the Borrower, the Agent and the Incremental Term Loan
Banks.
(vii) The
definition of “ Bridge
Debt ” is amended and
restated in its entirety to read as follows:
“ Bridge Debt ”
means any Debt incurred pursuant to Section 5.07(b)(iv) relating to
a bridge financing of any Covered Asset Sale.
(viii)
The definition of “ Collateral Coverage Ratio ” is deleted in its
entirety.
(ix)
The definition of “ Corporate Charges ” is amended by (A)
replacing “rental expense of the Borrower for such
period” in clause (ii) thereof with “payments made by
the Borrower pursuant to clause (iii) of Section 5.09(a) during
such period” and (B) replacing clause (iv) thereof with the
following “(iv) dividends paid on Trust Preferred Securities
during such period”.
(x) The
definition of “ Creditors’ Portion ” is amended and
restated in its entirety to read as follows:
“ Creditors’
Portion ” means, in respect of any Net Cash Proceeds, (i)
60% of such Net Cash Proceeds at any time that the Recourse Debt to
Cash Flow Ratio is greater to or equal to 5.0:1.0 or (ii) 50% of
such Net Cash Proceeds at any time that the Recourse Debt to Cash
Flow Ratio is less than 5.0:1.0.
(xi)
The definition of “ Derivatives Obligations ” is amended by
replacing the first sentence thereof in its entirety with the
following:
“ Derivative
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, credit derivative transaction, 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;
provided that Derivatives Obligations shall not include any
obligations of such Person in relation to an equity forward
contract, equity or equity index swap or equity or equity index
option pertaining, linked or indexed to the common stock of such
Person or any affiliate thereof.
4
(xii) The
definition of “ Equity
Credit Preferred Securities ” is amended by (i)
adding the word “Existing” prior to “Trust
Preferred Securities” in clause (i)(B) thereof, (ii)
inserting the word “and” immediately prior to clause
(i)(D) thereof, (iii) deleting the word “and” from the
end of clause (i)(D) thereof, (iv) deleting in its entirety clause
(i)(E) thereof and (v) adding the word “Existing” prior
to “Trust Preferred Securities” in clause (ii) thereof
each time it appears.
(xiii) The
definition of “ Equity
Interests ” is amended by adding
to the end of such definition, immediately before the period, the
following language: “; provided that Equity Interest
shall not include Trust Preferred Securities (other than the
Existing Trust Preferred Securities)”.
(xiv)
The definition of “ Euro-Dollar Margin ” is amended and
restated in its entirety to read as follows:
“ Euro-Dollar Margin
” means (i) in respect of the Revolving Credit Loans, a rate
per annum equal to the Applicable Revolving Margin, (ii) in respect
of the Initial Term Loans, a rate per annum equal to 1.75% (subject
to the provisions of Section 2.06(f) hereof) and (iii) in respect
of the Incremental Term Loan Facility, a rate per annum to be
agreed to by the Borrower, the Agent and the Incremental Term Loan
Banks.
(xv) The
definition of “ Parent
Operating Cash Flow ” is amended by (A)
deleting the word “and” from the end of clause (iv)
thereof, (B) redesignating clause (v) thereof clause
“(vi)” and (C) inserting immediately after clause (iv)
thereof the following clause (v):
“(v)
cash payments made to the Borrower in respect of foreign exchange
Hedge Agreements or other foreign exchange activities entered into
by the Borrower on behalf of any of its Subsidiaries;
and”.
(xvi)
The definition of “ Recourse Debt ” is amended by adding
to the end of such definition, immediately before the period, the
following language: “plus (iii) Off Balance Sheet Obligations
of the Borrower”.
(xvii)
The definition of “ Revolving Letter of Credit Commission
Rate ” is hereby amended by
substituting for “2.50%” where it appears therein the
following: “the Applicable Revolving
Margin”.
(xviii)
The definition of “ Secured Hedge Agreement ” is amended by (A)
adding to such definition immediately before the phrase “is
entered into by” the following: “(i)” and
(B) by adding to the end of such definition, immediately
before the period, the following language: “and (ii)
specifies by its terms that it is secured by the
Collateral”.
(xix) The
definition of “ Special
Purpose Financing Subsidiary ” is amended by
substituting for “Equity Credit Preferred Securities”
where it appears therein the following: “Trust Preferred
Securities”.
5
(xx) Clause
(i) of the definition of “ Termination Date ” is amended by
substituting for “July 31, 2007” where it appears
therein the following: “June [ ],
2010”.
(b)
Section 2.09(b)(ii) is amended and restated in its entirety to read
as follows:
“(ii)
Net Cash Proceeds of Asset Sales .
(x)
Other than in the case of a Covered Asset Sale involving the sale
of assets or Equity Interests of, or other Investments in, IPALCO
or any of its Subsidiaries (an “ IPALCO Asset Sale
”), on and after the date on which all of the Term Loan
Facilities have been paid in full, in the event that the Borrower
shall at any time, or from time to time, receive any Net Cash
Proceeds from Covered Asset Sales, the Revolving Credit Loan
Commitments of the Revolving Credit Loan Banks shall, unless the
Required Banks otherwise agree, be ratably reduced by such amounts
and at such times as may be required to avoid any requirement that
all or any portion of such Net Cash Proceeds be applied to repay,
prepay, repurchase or defease any Debt of the Borrower that is
subordinated in right of payment to the Debt of the Borrower under
the Financing Documents.
(y)
In the case of an IPALCO Asset Sale, following the application of
the Net Cash Proceeds thereof to repay Term Loans in accordance
with Section 2.10(b)(i) or if the Term Loan Facilities have been
paid in full, the Revolving Credit Loan Commitments of the
Revolving Credit Loan Banks shall, (A) unless the Supermajority
Banks otherwise agree or the Minimum Ratings Condition is met at
such time (after giving effect to such IPALCO Asset Sale), be
ratably reduced by an amount equal to the Banks’ Ratable
Share of such remaining Net Cash Proceeds (concurrently with the
prepayment of outstanding Revolving Credit Loans in accordance with
Section 2.10(b)(i)) and (B) after giving effect to any reduction in
clause (A), unless the Required Banks otherwise agree, be ratably
reduced by such amounts and at such times as may be required to
avoid any requirement that all or any portion of such Net Cash
Proceeds be applied to repay, prepay, repurchase or defease any
Debt of the Borrower that is subordinated in right of payment to
the Debt of the Borrower under the Financing
Documents.”
(c)
Section 2.10(b) is amended and restated in its entirety to read as
follows:
“(b)
Mandatory . (i) The Borrower shall, on the third
Business Day following the receipt by the Borrower after the
Effective Date of (A) Net Cash Proceeds from any Covered Asset
Sales or (B) Net Cash Proceeds from the incurrence of any
Bridge Debt, offer to prepay, on a pro rata basis, an aggregate
principal amount of the Term Loans in an amount equal to the
Banks’ Ratable Share of such Net Cash Proceeds and the Term
Loan Banks shall have the option to accept or refuse such
prepayment in accordance with the provisions set forth in Section
2.10(c). Upon the payment in full of the Term Loans, the
Borrower shall apply such Net Cash Proceeds to prepay the Revolving
Credit Loans outstanding at such time (without any reduction of
Revolving Credit Loan Commitments, except as set forth in Section
2.09(b)(ii)).
(ii)
The Borrower shall, on the third Business Day following the date of
receipt of Net Cash Proceeds from the issuance of Debt by any
Subsidiary of the Borrower permit-
6
ted pursuant to Section 5.07(b)(ii)
(but only to the extent applicable pursuant to the proviso
thereof) and Section 5.07(b)(vi) (but only to the extent the Debt
was incurred by IPALCO or a Subsidiary Guarantor), offer to prepay
an aggregate principal amount of the Term Loans in an aggregate
amount equal to the Banks’ Ratable Share of such Net Cash
Proceeds (other than $200,000,000 of additional Debt of IPALCO and
the Subsidiary Guarantors incurred after the date hereof).
The Term Loan Banks shall have the option to accept or refuse any
prepayment pursuant to this Section 2.10(b)(ii) in accordance with
the provisions set forth in Section 2.10(c). So long as Net
Cash Proceeds referred to in this Section 2.10(b)(ii) are received
by the Borrower, the Borrower agrees to use all reasonable efforts
to cause all such Net Cash Proceeds permitted to be distributed to
be so distributed. Upon the payment in full of the Term
Loans, the Borrower shall apply such Net Cash Proceeds to prepay
the Revolving Credit Loans outstanding at such time (without any
reduction of Revolving Credit Loan Commitments).”
(d)
Section 2.17(a) is amended by (A) inserting immediately after the
phrase “Section 2.10 hereof” the following “or to
permanently reduce Revolving Credit Loan Commitments pursuant to
Section 2.09 hereof less the aggregate amount of Revolving
Credit Loan Commitment Increases pursuant to Section 2.18”
and (B) inserting immediately after the figure
“$700,000,000” the following “ less the
aggregate amount of Revolving Credit Loan Commitment Increases
pursuant to Section 2.18”.
(e)
Section 2.17(d) is amended be substituting for “Section
10.06(g)” where it appears therein the following:
“Section 10.06(f)”.
(f)
The following new Section 2.18 is added:
“Section 2.18.
Increase in Revolving Credit Loan Commitments .
(a) The Borrower may, at any time and from time to time prior
to the Termination Date of the Revolving Credit Loan Facility, by
notice to the Agent, request one or more increases in the
Commitments under the Revolving Credit Loan Facility existing at
the time of such request (each, a “ Revolving Credit Loan
Commitment Increase ”) in an aggregate amount up to
$500,000,000 plus the sum of all amounts applied from time
to time after the Effective Date to permanently reduce Revolving
Credit Loan Commitments pursuant to Section 2.09 hereof or to
permanently repay Term Loans pursuant to Section 2.10 hereof
less the aggregate amount of Incremental Term Loan
Facilities and Commitment Increases pursuant to Section 2.17, to be
effective as of a date that is at least 90 days prior to the
scheduled Termination Date then in effect (each, a “
Revolving Credit Increase Date ”) as specified in the
related notice to the Agent; provided , however ,
that (i) in no event shall the aggregate amount of such
Revolving Credit Loan Commitment Increases exceed $700,000,000
less the aggregate amount of Incremental Term Loan
Facilities and Commitment Increases pursuant to Section 2.17 and
(ii) on the date of any request by the Borrower for a
Revolving Credit Loan Commitment Increase and on the related
Revolving Credit Increase Date, the applicable conditions set forth
in Section 3.02 and in clause (d) of this
Section 2.18 shall be satisfied, provided that no Bank
shall have any obligation to participate in any Revolving Credit
Loan Commitment Increase.
“(b)
The Agent shall promptly notify the Revolving Credit Loan Banks of
any request by the Bor
