**Exhibit 10.5**

EXECUTION COPY 

**AMENDMENT NO. 2**

AMENDMENT NO. 2 dated as of July 11, 2006 to the Credit Agreement referred to below, among DYNEGY HOLDINGS INC. (the“Borrower”), DYNEGY INC. (the “Parent Guarantor”), the SUBSIDIARY GUARANTORS party thereto (the “Subsidiary Guarantors”), the Lenders (as defined in the Credit Agreement referred to below) partythereto (the “Lenders”), JPMORGAN CHASE BANK, N.A. and CITICORP USA, INC., as Administrative Agents, CITICORP USA, INC., as Payment Agent, JPMORGAN CHASE BANK, N.A., as Collateral Agent, and each L/C ISSUER party thereto.

**PRELIMINARY STATEMENTS**

1. The Borrower, the Parent Guarantor, the Subsidiary Guarantors, the Lenders, the Administrative Agents and the Collateral Agent are parties to a Fourth Amended and Restated Credit Agreement dated as of April 19, 2006 (asheretofore modified and supplemented and in effect on the date hereof, the “Credit Agreement”). 

2. The Borrower hasrequested that the Lenders agree to certain amendments to the Credit Agreement. 

In consideration of the mutual covenants and agreementsherein contained, the parties hereto hereby agree as follows: 

Section 1. Defined Terms. Except as otherwise defined in thisAmendment No. 2, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. 

Section 2. Amendments to the Credit Agreement. Subject to the satisfaction of the conditions set forth in Section 4 of this Amendment No. 2, but effective as of the date hereof, the Credit Agreement is herebyamended as follows: 

2.01. Definitions. Section 1.01 of the Credit Agreement shall be amended by inserting the following newdefinition in the appropriate alphabetical location as follows: 

“***Revolving Approved Fund***” means anyPerson (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Revolving CreditLender, (b) an Affiliate of a Revolving Credit Lender or (c) an entity or an Affiliate of an entity that administers or manages a Revolving Credit Lender. 

2.02. Successors and Assigns. Section 11.07(b) of the Credit Agreement shall be amended by amending and restating in its entirety clause (A) of clause (ii) of the proviso in the first sentencethereof to read as follows: 

“(A) in respect of the Revolving Credit Facility, to a Revolving Credit Lender, anAffiliate of a Revolving Credit Lender or a Revolving Approved Fund;”. 

Section 3. Representations and Warranties. Each ofthe Borrower and the Parent Guarantor represents and warrants to the Lenders and the Agents that (a) the representations and 

AmendmentNo. 2 

warranties of each Loan Party contained in Article V of the Credit Agreement or in any other Loan Document, or whichare contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects on and as of the date hereof and as if each reference therein to the Credit Agreement or words oflike import included reference to this Amendment and the Credit Agreement as amended hereby (except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in allmaterial respects as of such earlier date) and the consolidated financial statements of the Parent Guarantor and the Borrower as of and for the fiscal quarter and the portion of the fiscal year ended March 31, 2006 furnished pursuant toSections 6.01(b) and (d), respectively, of the Credit Agreement fairly present in all material respects the consolidated financial condition of the Parent Guarantor or the Borrower, respectively, and its Subsidiaries as of the date thereof andtheir results of operations for the period covered thereby in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes, (b) no Default shall exist and (c) since December 31, 2005, except asdisclosed in any Public Disclosure, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect. 

Section 4. Conditions to Effectiveness. The effectiveness of the amendments to the Credit Agreement set forth in Section 2 of thisAmendment No. 2 is subject to the receipt by the Payment Agent of one or more duly executed and delivered counterparts of this Amendment No. 2 from each of the Borrower, the Parent Guarantor, Lenders constituting the RequiredLenders, each of the Revolving Credit Lenders and the Administrative Agents. 

Section 5. Confirmation of Guarantee and CollateralDocuments. Each of the Loan Parties hereby confirms and ratifies all of its respective obligations under the Credit Agreement as amended hereby and the Loan Documents to which it is a party (including, its respective obligations as a guarantorunder Article X of the Credit Agreement) and the Liens granted by it under the respective Loan Documents (as amended hereby). 

Section 6. Miscellaneous. Except as herein provided, the Credit Agreement shall remain unchanged and in full force and effect. This Amendment No. 2 may be executed in any number of counterparts, all of which takentogether shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Amendment No. 2 by signing any such counterpart. This Amendment No. 2 shall be governed by, and construed inaccordance with, the law of the State of New York. 

Amendment No. 2 

 

- 2 - 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be duly executed anddelivered by their respective proper and duly authorized officers as of the day and year first above written. 

 
DYNEGY INC.By: 
/s/ Charles C. Cook
Name: Charles C. CookTitle: Senior Vice President and TreasurerDYNEGY HOLDINGS INC.By: 
/s/ Charles C. Cook
Name: Charles C. CookTitle: Senior Vice President and Treasurer
Amendment No. 2 

 

- 3 - 

SUBSIDIARY GUARANTORS:

DYNEGY POWER CORP.

DPC II INC.

DYNEGY ENGINEERING, INC.

DYNEGY SERVICES, INC.

DYNEGY POWER MANAGEMENT SERVICES, L.P.

CALCASIEU POWER, INC.

DYNEGY PARTS AND TECHNICAL SERVICES, INC.

DYNEGY POWER MANAGEMENT SERVICES, INC.

HEP COGEN, INC.

NORTHWAY COGEN, INC.

DYNEGY POWER INVESTMENTS, INC.

DYNEGY POWER SERVICES, INC.

DYNEGY POWER NEVADA, INC.

MICHIGAN COGEN, INC.

MICHIGAN POWER, INC.

OCG COGEN, INC.

OYSTER CREEK COGEN, INC.

RRP COMPANY

DPC COLOMBIA – OPON POWER RESOURCES COMPANY

TERMO SANTANDER HOLDING, LLC

RIVERSIDE GENERATION, INC.

RIVERSIDE GENERATING COMPANY, L.L.C.

ROLLING HILLS GENERATION, INC.

DYNEGY RENAISSANCE POWER, INC.

DYNEGY NORTHEAST GENERATION, INC.

HUDSON POWER, L.L.C.

DYNEGY MIDSTREAM GP, INC.

DYNEGY UPPER HOLDINGS, L.L.C.

DYNEGY HOLDING COMPANY, L.L.C

By:
 
/s/ Charles C. Cook

Name:
 
Charles C. Cook

Title:
 
Senior Vice President and Treasurer

Amendment No. 2 

 

- 4 - 

DMG ENTERPRISES, INC.

HAVANA DOCK ENTERPRISES, LLC

DMT HOLDINGS, INC.

DMT G.P., L.L.C.

DMT HOLDINGS, L.P.

DYNEGY MARKETING AND TRADE

DYNEGY COAL TRADING & TRANSPORTATION, L.L.C.

NGC STORAGE, INC.

BLACK THUNDER MEMBER, INC.

ILLINOVA CORPORATION

ILLINOVA GENERATING COMPANY

IGC GRIMES COUNTY, INC.

IGC GRIMES FRONTIER, INC.

IPG FERNDALE, INC.

IPG PARIS, INC.

CHARTER OAK (PARIS) INC.

ILLINOVA ENERGY PARTNERS, INC.

PARISH POWER, INC.

CALCASIEU POWER, LLC

DELTA COGEN, INC.

DYNEGY POWER HOLDINGS, INC.

COGEN POWER, INC.

COGEN POWER, L.P.

BG HOLDINGS, INC.

BLACK MOUNTAIN COGEN, INC.

BLUEGRASS GENERATION, INC.

BLUEGRASS GENERATION COMPANY, L.L.C.

DYNEGY CABRILLO II LLC

BLUE RIDGE GENERATION INC.

BLUE RIDGE GENERATION LLC

CHICKAHOMINY GENERATING COMPANY

CHICKAHOMINY POWER, LLC

FLORIDA MERCANTILE POWER, INC.

GASIFICATION SERVICES, INC.

PAMETTO POWER, L.L.C.

DYNEGY OPERATING COMPANY

By:
 
/s/ Charles C. Cook

Name:
 
Charles C. Cook

Title:
 
Senior Vice President and Treasurer

Amendment No. 2 

 

- 5 - 

GEORGIA MERCANTILE POWER, INC.

HEARD COUNTY POWER, L.L.C.

DYNEGY ROSETON, L.L.C.

DYNEGY HUDSON POWER RETAIL, L.L.C.

DYNEGY GLOBAL ENERGY, INC.

DYNEGY BROADBAND MARKETING AND TRADE

DYNEGY GP INC.

DYNEGY TECHNOLOGY CAPITAL CORP.

DYNEGY STRATEGIC INVESTMENTS, L.P.

DYNEGY STRATEGIC INVESTMENTS GP, L.L.C.

RENAISSANCE POWER, L.L.C.

ROLLING HILLS GENERATING, L.L.C.

DYNEGY POWER MARKETING, INC.

DYNEGY ENERGY SERVICES, INC.

ILLINOIS POWER ENERGY, INC.

DES NORTHEAST, INC.

DEM GP, LLC

DYNEGY ENERGY MARKETING, LP

DYNEGY ADMINISTRATIVE SERVICES COMPANY

NIPC, INC.

DYNEGY CATLIN MEMBER, INC.

DYNEGY MIDWEST GENERATION , INC.

DYNEGY I.T., INC.

JAMES RIVER ENERGY CORP.

DPC POWER RESOURCES HOLDING COMPANY

ROCKINGHAM POWER, L.L.C.

DYNEGY POWER DEVELOPMENT COMPANY

By:
 
/s/ Charles C. Cook

Name:
 
Charles C. Cook

Title:
 
Senior Vice President and Treasurer

Amendment No. 2 

 

- 6 - 

DYNEGY STRATEGIC INVESTMENTS LP, INC.

DYNEGY DANSKAMMER, L.L.C.

DYNEGY MIDSTREAM HOLDINGS, INC.

DYNEGY GAS TRANSPORTATION, INC.

DYNEGY STORAGE TECHNOLOGY AND SERVICES, INC.

CHESAPEAKE POWER, INC.

ROCKY ROAD POWER LLC

By:
 
/s/ Charles C. Cook

Name:
 
Charles C. Cook

Title:
 
Senior Vice President and Treasurer

Amendment No. 2 

 

- 7 - 

COGEN LYONDELL, INC.By: 
/s/ Charles C. Cook
Name: Charles C. CookTitle: Senior Vice President and Treasurer
Amendment No. 2 

 

- 8 - 

DYNEGY MANAGEMENT, INC.DEM L.P., LLCDMT L.P., L.L.C.By: 
/s/ Richard W. Eimer
Name: Richard W. EimerTitle: Senior Vice President
Amendment No. 2 

 

- 9 - 

ADMINISTRATIVE AGENTSJPMORGAN CHASE BANK. N.A.By: 
/s/ Robert W. Traband
Name: Robert W. TrabandTitle: Vice President
CITICORP USA, INC.

as Administrative Agentand Lender
By: 
/s/ Richard Evans
Name: Richard EvansTitle: Vice President
Amendment No. 2 

 

- 10 - 

LENDERSName of Lender:Ares VR CLO Ltd.By: Ares CLO Management VR, L.P., Investment ManagerBy: Ares CLO GP VR, LLC, Its General PartnerBy: 
/s/ Americo Cascella
Name: Americo CascellaTitle: Vice PresidentLENDERSName of Lender:Ares VIR CLO Ltd.By: Ares CLO Management VIR, L.P., Investment ManagerBy: Ares CLO GP VIR, LLC, Its General PartnerBy: 
/s/ Americo Cascella
Name: Americo CascellaTitle: Vice PresidentLENDERSName of Lender:CONFLUENT 2 LIMITEDBy: Ares Private Account Management I, L.P., as Sub-ManagerBy: Ares Private Account Management I GP, LLC, as General PartnerBy: 
/s/ Americo Cascella
Name: Americo CascellaTitle: Vice PresidentLENDERSName of Lender:ABN Amro Bank N.V.By: 
/s/ Jim Moyes
Name: Jim MoyesTitle: Managing DirectorBy: 
/s/ John Reed
Name: John ReedTitle: DirectorLENDERSName of Lender:Bank of America, N.A.By: 
/s/ Kevin P. Bertelsen
Name: Kevin P. BertelsenTitle: Senior Vice PresidentLENDERSName of Lender:Credit Suisse, Cayman Islands Branch:By: 
/s/ Thomas R. Cantello
Name: Thomas R. CantelloTitle: Vice PresidentBy: 
/s/ James Neira
Name: James NeiraTitle: AssociateLENDERSName of Lender:Dresdner Bank AG, New York and Grand Cayman BranchesBy: 
/s/ Thomas R. Brady
Name: Thomas R. BradyTitle: DirectorBy: 
/s/ Brian M. Smith
Name: Brian M. SmithTitle: Managing DirectorLENDERSName of Lender:General Electric Capital CorporationBy: 
/s/ Matthew A. Toth III
Name: Matthew A. Toth IIITitle: Authorized SignatoryLENDERSName of Lender:JPMORGAN CHASE BANK, N.A.By: 
/s/ Robert W. Traband
Name: Robert W. TrabandTitle: Vice PresidentLENDERSName of Lender:Lehman Commercial Paper Inc. and its affiliatesBy: 
/s/ Maria M. Lund
Name: Maria M. LundTitle: Authorized SignatoryLENDERSName of Lender:Union Bank of California, N.A.By: 
/s/ Susan K. Johnson
Name: Susan K. JohnsonTitle: Vice President
Amendment No. 2 

 

- 11 -