Document/Exhibit Description Pages Size
1: 10-K Annual Report 155 891K
2: EX-3.2 Amended and Restated Bylaws 13 52K
3: EX-4.18 Credit Agreement 164 671K
4: EX-4.19 Credit Agreement 175 682K
5: EX-4.20 Indenture 129 582K
6: EX-4.21 Indenture 89 410K
7: EX-4.24 Pledge Agreement 25 93K
8: EX-4.25 Intercreditor Agreement 68 199K
9: EX-4.26 Intercreditor Agreement 82 189K
10: EX-4.27 Security Agreement 56 224K
11: EX-4.28 Security Agreement 50 193K
12: EX-4.29 Pledge Agreement 27 94K
13: EX-4.30 Security and Pledge Agreement 20 67K
14: EX-4.31 Revolving Credit and Guaranty Agreement 85 326K
15: EX-4.32 First Amendment to Revolving Credit Agreement 6 23K
16: EX-4.33 Second Amendment to Revolving Credit and Guaranty 15 48K
17: EX-4.34 Third Amendment to Revolving Credit and Guaranty 6 20K
18: EX-4.35 Fourth Amendment to Revolving Credit and Guaranty 6 23K
19: EX-4.36 First Preferred Fleet Mortgage 42 141K
20: EX-4.37 First Preferred Fleet Mortgage 42 141K
21: EX-4.38 First Preferred Fleet Mortgage 42 141K
22: EX-10.14 Separation and Termination Agreement 12 56K
23: EX-10.15 Separation and Termination Agreement 4 23K
24: EX-10.17 Release and Waiver of Employment 9 41K
25: EX-10.20 Engagement Letter 7 47K
26: EX-10.25 Tax Sharing Agreement 14 50K
27: EX-10.26 Corporate Services Reimbursement Agreement 6 31K
28: EX-10.28 Credit Agreement 157 576K
29: EX-10.29 Credit Agreement 132 576K
30: EX-10.30 Management Services and Reimbursement Agreement 24 76K
31: EX-23.1 Consent of Independent Accountants 1 11K
32: EX-31.1 Certificate of CEO 2± 15K
33: EX-31.2 Certificate of CFO 2± 15K
34: EX-32.1 Certificate of CEO 1 12K
35: EX-32.2 Certificate of CFO 1 12K
EXHIBIT 4.19
CREDIT AGREEMENT
DATED AS OF MARCH 10, 2004
AMONG
COVANTA ENERGY CORPORATION
AND
EACH OF ITS SUBSIDIARIES PARTY HERETO,
THE LENDERS LISTED HEREIN,
AS LENDERS,
AND
BANK ONE, NA,
AS ADMINISTRATIVE AGENT
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Page No.
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Section 1. DEFINITIONS.................................................................................... 1
1.1. Certain Defined Terms.......................................................................... 1
1.2. Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement............. 39
1.3. Other Definitional Provisions and Rules of Construction........................................ 40
Section 2. REVOLVING LOANS; INTEREST RATES; FEES; AND CERTAIN TERMS OF PAYMENT AND REPAYMENT AND
OTHER MATTERS.................................................................................. 40
2.1. Revolving Loan Commitments; Making of Revolving Loans; the Register; Optional Notes............ 40
2.2. Interest on the Revolving Loans................................................................ 44
2.3. Fees........................................................................................... 47
2.4. Mandatory Payments, Reductions in Commitments; General Provisions Regarding Payments;
Application of Proceeds of Collateral.......................................................... 48
2.5. Use of Proceeds................................................................................ 55
2.6. Special Provisions Governing Eurodollar Rate Loans............................................. 55
2.7. Increased Costs; Taxes; Capital Adequacy....................................................... 57
2.8. Statement of Lenders; Obligation of Lenders and Issuing Lender to Mitigate..................... 60
2.9. Defaulting Lender.............................................................................. 61
2.10. Joint and Several Liability; Payment Indemnifications.......................................... 63
2.11. Rights of Subrogation, Contribution, Etc....................................................... 63
Section 3. LETTERS OF CREDIT.............................................................................. 64
3.1. Letter of Credit Commitments; Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein......................................................................... 64
3.2. Letter of Credit Fees.......................................................................... 68
3.3. Drawings and Reimbursement of Amounts Paid Under Letters of Credit............................. 69
3.4. Obligations Absolute........................................................................... 71
3.5. Nature of Issuing Lender's Duties.............................................................. 72
3.6. Cash Collateral for Letters of Credit.......................................................... 73
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Section 4. CONDITIONS..................................................................................... 74
4.1. Conditions to Closing Date..................................................................... 74
4.2. Conditions to All Revolving Loans.............................................................. 85
4.3. Conditions to Letters of Credit................................................................ 86
Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES....................................................... 86
5.1. Organization, Powers, Qualification, Good Standing, Business and Subsidiaries.................. 87
5.2. Authorization of Borrowing, Etc................................................................ 87
5.3. Financial Condition............................................................................ 88
5.4. No Material Adverse Change; No Restricted Payments............................................. 89
5.5. Title to Properties; Liens; Real Property; Intellectual Property............................... 89
5.6. Litigation; Adverse Facts...................................................................... 90
5.7. Payment of Taxes............................................................................... 90
5.8. Performance of Agreements; Material Contracts.................................................. 91
5.9. Governmental Regulation........................................................................ 91
5.10. Securities Activities.......................................................................... 91
5.11. Employee Benefit Plans......................................................................... 91
5.12. Certain Fees................................................................................... 93
5.13. Environmental Protection....................................................................... 93
5.14. Employee Matters............................................................................... 94
5.15. Matters Relating to Collateral................................................................. 94
5.16. Disclosure..................................................................................... 95
5.17. Cash Management System......................................................................... 96
5.18. Matters Relating to Credit Parties............................................................. 96
5.19. Investigation.................................................................................. 96
5.20. Matters Relating to Bankruptcy Proceedings..................................................... 97
5.21. Subordinated Indebtedness...................................................................... 97
5.22. Reporting to IRS............................................................................... 97
5.23. Solvency....................................................................................... 97
Section 6. COMPANY'S AFFIRMATIVE COVENANTS................................................................ 97
6.1. Financial Statements and Other Reports......................................................... 98
6.2. Existence, Etc................................................................................. 103
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6.3. Payment of Taxes and Claims; Tax............................................................... 103
6.4. Maintenance of Properties; Insurance; Application of Net Insurance/ Condemnation
Proceeds....................................................................................... 104
6.5. Inspection Rights; Lender Meeting.............................................................. 106
6.6. Compliance with Laws, Etc...................................................................... 107
6.7. Environmental Matters.......................................................................... 107
6.8. Execution of Borrower Joinder Agreement and Personal Property Collateral Documents
After the Closing Date......................................................................... 109
6.9. Matters Relating to Additional Real Property Collateral........................................ 110
6.10. Deposit Accounts............................................................................... 111
6.11. Further Assurances............................................................................. 111
6.12. High Yield Notes............................................................................... 113
6.13. Most Favored Nations Payments.................................................................. 113
6.14. Montgomery Letter of Credit Cancellation....................................................... 113
Section 7. BORROWERS' NEGATIVE COVENANTS.................................................................. 113
7.1. Indebtedness................................................................................... 114
7.2. Liens and Related Matters...................................................................... 117
7.3. Investments; Acquisitions...................................................................... 120
7.4. Contingent Obligations; Performance Guaranties................................................. 123
7.5. Restricted Payments............................................................................ 125
7.6. Financial Covenants............................................................................ 127
7.7. Restriction on Fundamental Changes; Asset Sales................................................ 130
7.8. Transactions with Shareholders and Affiliates.................................................. 132
7.9. Restriction on Leases.......................................................................... 132
7.10. [Intentionally Omitted]........................................................................ 133
7.11. Conduct of Business............................................................................ 133
7.12. Amendments to Related Agreements, Debt Documentation and Organizational Documents.............. 133
7.13. End of Fiscal Years; Fiscal Quarters........................................................... 134
7.14. Amendment to Pension Plans..................................................................... 134
Section 8. EVENTS OF DEFAULT.............................................................................. 134
8.1. Failure to Make Payments When Due.............................................................. 135
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8.2. Default in Other Agreements.................................................................... 135
8.3. Breach of Certain Covenants.................................................................... 135
8.4. Breach of Warranty............................................................................. 136
8.5. Other Defaults Under Credit Documents.......................................................... 136
8.6. Involuntary Bankruptcy; Appointment of Receiver, Etc........................................... 136
8.7. Voluntary Bankruptcy; Appointment of Receiver, Etc............................................. 136
8.8. Judgments and Attachments...................................................................... 137
8.9. Dissolution.................................................................................... 137
8.10. Employee Benefit Plans......................................................................... 137
8.11. [Material Adverse Effect....................................................................... 138
8.12. Change in Control.............................................................................. 138
8.13. Invalidity of Intercreditor Agreement; Failure of Security; Repudiation of Obligations......... 138
8.14. Termination of Material Contracts.............................................................. 138
8.15. NOL Treatment.................................................................................. 139
Section 9. ADMINISTRATIVE AGENT........................................................................... 140
9.1. Appointment.................................................................................... 140
9.2. Powers and Duties; General Immunity............................................................ 140
9.3. Independent Investigation by Lenders; No Responsibility For
Appraisal of Creditworthiness.................................................................. 142
9.4. Right to Indemnity............................................................................. 142
9.5. Successor Administrative Agents................................................................ 143
9.6. Intercreditor Agreement........................................................................ 143
9.7. Administrative Agent May File Proofs of Claim.................................................. 144
Section 10. MISCELLANEOUS.................................................................................. 145
10.1. Successors and Assigns; Assignments and Participations in Letters of Credit.................... 145
10.2. Expenses....................................................................................... 149
10.3. Indemnity...................................................................................... 150
10.4. Set-Off........................................................................................ 151
10.5. Ratable Sharing................................................................................ 151
10.6. Amendments and Waivers......................................................................... 152
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10.7. Independence of Covenants...................................................................... 154
10.8. Notices; Effectiveness of Signatures........................................................... 154
10.9. Survival of Representations, Warranties and Agreements......................................... 155
10.10. Failure or Indulgence Not Waiver; Remedies Cumulative.......................................... 155
10.11. Marshalling; Payments Set Aside................................................................ 155
10.12. Severability................................................................................... 156
10.13. Obligations Several; Independent Nature of Lenders' Rights; Damage Waiver...................... 156
10.14. Release of Security Interest................................................................... 156
10.15. Headings....................................................................................... 157
10.16. Applicable Law................................................................................. 157
10.17. Construction of Agreement...................................................................... 157
10.18. Consent to Jurisdiction and Service of Process................................................. 157
10.19. Waiver of Jury Trial........................................................................... 158
10.20. Confidentiality................................................................................ 159
10.21. No Fiduciary Duty.............................................................................. 159
10.22. Counterparts; Effectiveness.................................................................... 160
10.23. No Third Party Beneficiaries................................................................... 160
SIGNATURE PAGES.................................................................................................. S-1
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EXHIBITS
I NOTICE OF BORROWING
II FORM OF REVOLVING NOTE
III FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT
IV NOTICE OF CONVERSION / CONTINUATION
V FORM OF COMPLIANCE CERTIFICATE
VI FORM OF ASSIGNMENT AGREEMENT
VII FORM OF SECURITY AGREEMENT
VIII FORM OF BORROWER JOINDER AGREEMENT
IX FORM OF SOLVENCY CERTIFICATE
X FORM OF OPINIONS OF CREDIT PARTIES' COUNSEL
XI DHC PLEDGE AGREEMENT
XII [INTENTIONALLY OMITTED]
XIII FORM OF INTERCREDITOR AGREEMENT
XIV FORM OF MORTGAGE
XV [INTENTIONALLY OMITTED]
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SCHEDULES
1.1A [INTENTIONALLY OMITTED]
1.1B PRINCIPAL LEASE, SERVICE AND OPERATING AGREEMENTS
1.1C BUDGET
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
2.4A(iii)(f) DEBT SERVICE RESERVE ACCOUNTS
3.1(a)(i) LETTER OF CREDIT OBLIGATIONS
4.1C CORPORATE STRUCTURE
4.1N CLOSING DATE MORTGAGED PROPERTIES
4.1P CASH MANAGEMENT SYSTEM
5.1 COMPANY AND SUBSIDIARIES
5.5B REAL PROPERTY
5.5C INTELLECTUAL PROPERTY
5.6 LITIGATION
5.8A CERTAIN ALLEGED DEFAULTS
5.8C MATERIAL CONTRACTS
5.11 MATTERS RELATING TO EMPLOYEE BENEFIT PLANS
5.13 ENVIRONMENTAL MATTERS
7.1(vi) CERTAIN EXISTING INDEBTEDNESS
7.1(ix) CERTAIN EXISTING CAPITAL LEASES
7.2 CERTAIN EXISTING LIENS
7.3(v) CERTAIN EXISTING INVESTMENTS
7.3(vi) CERTAIN WTE PROJECTS
7.4(iv) CERTAIN EXISTING PERFORMANCE GUARANTIES
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7.4(vi) CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.6G STIPULATED ADJUSTED OPERATING CASH FLOW
7.8 CERTAIN TRANSACTIONS WITH AFFILIATES
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COVANTA ENERGY CORPORATION
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of March 10, 2004 and
entered into by and among COVANTA ENERGY CORPORATION, a Delaware corporation
("COMPANY"); EACH OF COMPANY'S SUBSIDIARIES LISTED ON THE SIGNATURE PAGES HEREOF
(each such Subsidiary and Company individually referred to herein as a
"BORROWER" and, collectively (together with any Additional Subsidiary Borrowers
(this and other capitalized terms used in the recitals hereto without definition
being used as defined in subsection 1.1)), on a joint and several basis, as
"BORROWERS"); THE PERSONS IDENTIFIED ON THE SIGNATURE PAGES HEREOF AS LENDERS
(each individually referred to herein as a "LENDER" and collectively as
"LENDERS"); and BANK ONE, NA ("BANK ONE"), as administrative agent for Lenders
(in such capacity, "ADMINISTRATIVE AGENT").
R E C I T A L S
WHEREAS, on April 1, 2002 (the "PETITION DATE"), Borrowers and
certain of their Domestic Subsidiaries (collectively, the "DEBTORS") filed
voluntary petitions for relief under the Bankruptcy Code with the United States
Bankruptcy Court for the Southern District of New York (such proceedings being
jointly administered under Case Nos. 02-40826 through 02-40949, 02-16322,
03-13679 through 03-13685, and 03-13687 through 03-13709 are hereinafter
referred to as the "CHAPTER 11 CASES"), and each Borrower has operated its
businesses and managed its properties as a debtor-in-possession pursuant to
Sections 1107 and 1108 of the Bankruptcy Code; and
WHEREAS, the Debtors have proposed, their creditors have
approved, and the Bankruptcy Court has confirmed, the Plan of Reorganization;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Borrowers, Lenders and
Administrative Agent agree as follows:
SECTION 1. DEFINITIONS
1.1. CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ADDITIONAL SUBSIDIARY BORROWER" has the meaning assigned to
that term in subsection 6.8B.
"ADJUSTED EBITDA" means, for any period, (i) without
duplication, the aggregate amount derived by combining the amounts for such
period of (a) "Operating income (loss)", plus (b) Net Depreciation and
Amortization Expense, plus (c) "Amortization of premium and discount, net" plus
(d) "Unbilled receivables", to the extent associated with accretion accounting
for Limited Recourse Debt relating to Projects of Company and its Subsidiaries,
minus (e) "Equity in income from unconsolidated investments", minus (ii) without
duplication, the aggregate amount derived by combining the amounts (each
expressed as a positive number) for such period of (a) "Payment of debt", to the
extent consisting of principal payments on Limited Recourse Debt relating to
Projects of Company and its Subsidiaries, plus (b) "Minority interests", plus
(c) accretion of principal on the High Yield Notes, as each such line item
referred to in clauses (i)(a), (i)(e) and (ii)(b) is reflected in Company's
consolidated statement of income prepared in conformity with GAAP and as each
such line item referred to in clauses (i)(c), (i)(d) and (ii)(a) is reflected in
Company's consolidated statement of cash flows prepared in conformity with GAAP,
in each case reported in a manner consistent with Company's reporting of such
amount in its quarterly or annual report (as the case may be) on Form 10Q or
10K, respectively, prior to the Closing Date, whether such line items are so
titled or otherwise titled; provided, however, that with respect to any such
period ending during 2008, each of the line items referred to above shall be
calculated as if the terms of the service agreement of Company and its
Subsidiaries relating to the Alexandria Project in effect for Fiscal Year 2007
continued in effect during 2008, without giving effect to any negative impact on
Adjusted EBITDA from the terms of any extension in 2008 of such service
agreement.
"ADMINISTRATIVE AGENT" has the meaning assigned to that term
in the introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person (other than exclusively as a result of such Person's
role as a senior executive of that Person or Project manager or operator),
whether through the ownership of voting securities or by contract or otherwise.
"AGGREGATE AMOUNTS DUE" has the meaning assigned to that term
in subsection 10.5.
"AGREEMENT" means this Credit Agreement dated as of March 10,
2004, as it may be amended, restated, supplemented or otherwise modified from
time to time.
"ANNUAL FREE CASH FLOW" means, for any period, (i) the sum for
such period of (without duplication) (a) all cash revenue received by Company
and its Subsidiaries from Projects and facilities that are not Projects, other
than amounts received by Company or such Subsidiary as a "pass through" entity
for debt service on Limited Recourse Debt, (b) all
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amounts previously in reserve with respect to Projects that are released from
such reserves to Company or any of its Subsidiaries, other than amounts that are
required to be paid (but that have not yet been paid) to third parties pursuant
to binding Contractual Obligations of Company or any of its Subsidiaries and
that are permitted under this Agreement to be paid to such third parties, (c)
all distributions made to Company and its Subsidiaries on account of Capital
Stock held by Company and its Subsidiaries, (d) all interest earned by Company
and its Subsidiaries on Cash On Hand of Company and its Subsidiaries, (e) all
amounts released to Company and its Subsidiaries from cash accounts related to
Expansions, excluding any portion of such amounts that are not expended in such
period and are required to be (and are permitted under this Agreement to be)
expended by Company and its Subsidiaries in connection with such Expansions in a
subsequent period (provided, that Administrative Agent shall have reviewed and
approved the exclusion of such portion of such released amounts from this clause
(i)(e) prior to such exclusion), (f) all reimbursement amounts received by
Company and its Subsidiaries under the Management Services and Reimbursement
Agreement, and (g) all cash refunds or rebates of taxes received by Company and
its Subsidiaries (but excluding from the amounts referred to in clauses (i)(a)
through (i)(g) any portion of such amounts that was previously required to be
applied (and was applied) as a Mandatory Payment), minus, without duplication of
amounts already excluded or deducted from clauses (i)(a) through (i)(g) above,
(ii) the sum for such period of (without duplication) (a) operating
disbursements of Company and its Subsidiaries, (b) Consolidated Facilities
Capital Expenditures, (c) corporate overhead of Company and its Subsidiaries,
(d) payments on debt and leases of Company and its Subsidiaries, to the extent
such payments are permitted to be made under this Agreement, (e) distributions
on Capital Stock of Subsidiaries to Persons other than Company and its
Subsidiaries, (f) all payments by Company and its Subsidiaries to third parties
during such period as a result of drawings under the Existing IPP International
Project Guaranties, (g) all payments by Company and its Subsidiaries to the
extent that such payments are required to be reimbursed to Company and its
Subsidiaries pursuant to the Management Services and Reimbursement Agreement,
(h) any amounts posted in such period by Company and its Subsidiaries for credit
support to the extent such amounts are required to be posted during such period
pursuant to binding Contractual Obligations of Company or any of its
Subsidiaries, (i) all cash principal, interest and fee payments (other than
Mandatory Payments) by Company and its Subsidiaries that are not prohibited by
the terms of this Agreement, including all payments made by Borrowers to
reimburse amounts drawn under Letters of Credit or letters of credit issued
under the Detroit L/C Facility Agreement, (j) all cash payments of taxes by
Company and its Subsidiaries, (k) all cash payments by Company and its
Subsidiaries during such period under the DHC Corporate Services Reimbursement
Agreement, to the extent such payments are permitted to be made under this
Agreement, and (l) all payments by Company and its Subsidiaries made during such
period into reserves with respect to Projects, to the extent such payments (1)
are required to be placed during such period in such reserves pursuant to
binding Contractual Obligations of Company or any of its Subsidiaries and (2)
are funded from amounts which are included in the amounts described in clause
(i) of this definition for such period; provided, however, that in any Fiscal
Year commencing with Fiscal Year 2005, Annual Free Cash Flow for such Fiscal
Year shall be reduced by the amount, if any, by which the sum of
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the amounts of Annual Free Cash Flow for each of the immediately preceding
Fiscal Years (commencing with Fiscal Year 2004) was less than zero.
"APPROVED FUND" means a Fund that is administered or managed
by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an
Affiliate of an entity that administers or manages a Lender.
"APPROVED PLAN OF REORGANIZATION" has the meaning assigned to
that term in subsection 4.1E(i).
"ASSET SALE" means the sale by Company or any of its
Subsidiaries to any Person of (i) any of the Capital Stock of any of Company's
Subsidiaries, (ii) substantially all of the assets of any division or line of
business of Company or any of its Subsidiaries, or (iii) any other assets
(whether tangible or intangible) of Company or any of its Subsidiaries (other
than (a) inventory sold in the ordinary course of business and (b) any such
other assets to the extent that the aggregate value of such assets sold in any
single transaction or related series of transactions is equal to $500,000 or
less and the aggregate value of all such other assets since the Closing Date is
equal to $2,000,000 or less, in each case so long as not less than 90% of the
consideration received for such assets shall be cash); provided, however, that
Asset Sales shall not include (1) any sale or discount, in each case without
recourse, of accounts receivable arising in the ordinary course of business, but
only in connection with the compromise or collection thereof (provided, that
sales and discounts of not more than $10,000,000 in face value of accounts
receivable may be excluded from Asset Sales pursuant this clause (1), and the
sole consideration received in connection with any such sale of accounts
receivable shall be cash), (2) any sale or exchange of specific items of
equipment, so long as the purpose of each such sale or exchange is to acquire
(and results within 120 days of such sale or exchange in the acquisition of)
replacement items of equipment which are the functional equivalent of the item
of equipment so sold or exchanged (provided, that any cash received in
connection with any such sale or exchange that is not expended as part of such
sale or exchange to obtain such replacement items of equipment, to the extent in
excess of the amounts set forth in clause (b) of this definition, shall be
deemed cash proceeds of an Asset Sale), (3) disposals of obsolete, worn out or
surplus property in the ordinary course of business (provided, that not less
than 75% of the consideration, if any, received in connection with any such
disposal shall be cash, and any such cash received, to the extent in excess of
the amounts set forth in clause (b) of this definition, shall be deemed cash
proceeds of an Asset Sale), (4) any discount or compromise of notes or accounts
receivable for less than the face value thereof, to the extent Company deems
necessary in order to resolve disputes that occur in the ordinary course of
business, or (5) any IPP International Sale.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit VI annexed hereto.
"ASSUMPTIONS" has the meaning assigned to that term in
subsection 5.11D.
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"BACK-UP CLOSING DATE LETTER OF CREDIT" means a Closing Date
Letter of Credit issued in support of a DIP Tranche A L/C or a DIP Tranche B L/C
and any Letter of Credit issued to replace or extend the same pursuant to
subsection 3.1B(ii)(a).
"BANK OF AMERICA" means Bank of America, N.A.
"BANK ONE" has the meaning assigned to that term in the
introduction to this Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"BANKRUPTCY COURT" means the United States Bankruptcy Court
for the Southern District of New York and any other court properly exercising
jurisdiction over any relevant Chapter 11 Case.
"BANKRUPT SUBSIDIARY" means any of the Warren Subsidiaries,
the Lake Subsidiary or the Tampa Subsidiaries, in each case so long as such
Debtor remains subject to its Chapter 11 Case before the Bankruptcy Court.
"BASE RATE" means, at any time, the higher of (i) the Prime
Rate or (ii) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate. Any change in the Base Rate due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective on the effective date of
such change.
"BASE RATE LOANS" means Revolving Loans bearing interest at
rates determined by reference to the Base Rate as provided in subsection 2.2A.
"BASE RATE MARGIN" means four and one-half of one percent
(4.50%).
"BORROWER JOINDER AGREEMENT" means a Borrower Joinder
Agreement, substantially in the form of Exhibit VIII annexed hereto.
"BORROWERS" has the meaning assigned to that term in the
introduction to this Agreement.
"BUDGET" means (i) with respect to Fiscal Year 2004, the
budget delivered by Company to Lenders on or prior to the Closing Date pursuant
to subsection 4.1G, setting forth projected cash receipts and expenditures for
Company and its Subsidiaries for each calendar month and each Fiscal Quarter
from the Closing Date through December 31, 2004, and projected net cash flows
for Company and its Subsidiaries for each Fiscal Year thereafter through
December 31, 2008, as such budget may be supplemented pursuant to subsection
6.1(i), and (ii) with respect to each Fiscal Year after 2004, the budget
delivered by Company to Lenders pursuant to subsection 6.1(xvi), setting forth
projected cash receipts and expenditures for Company and its Subsidiaries for
each calendar month and Fiscal Quarter during such Fiscal Year and projected net
cash flows for Company and its Subsidiaries for
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each Fiscal Year thereafter through December 31, 2009, as such budget may be
supplemented pursuant to subsection 6.1(i).
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New York or the
State of Illinois or is a day on which banking institutions located in such
state are authorized or required by law or other governmental action to close.
"CAPITAL EXPENDITURES" means cash expenditures by Company and
its Subsidiaries that, in conformity with GAAP, would be included in "additions
to property, plant or equipment" or comparable items reflected in the
consolidated statement of cash flows of Company and its Subsidiaries for the
relevant period.
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL STOCK" means the capital stock or other equity
interests of a Person.
"CASH MANAGEMENT SYSTEM" means the cash management system of
Borrowers, described in Schedule 4.1P annexed hereto, as such Cash Management
System may be modified pursuant to subsection 6.10.
"CASH ON HAND" has the meaning assigned to that term in
subsection 2.4A(iii)(f).
"CEA" means Covanta Energy Americas, Inc., a Delaware
corporation.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et
seq.), or any successor statute, and all implementing regulations promulgated
thereunder.
"CHANGE IN CONTROL" means the occurrence of any one or more of
the following: (i) DHC shall cease to own, directly, 80% or more of the
outstanding Capital Stock of Company; or (ii) any "change of control" or "change
in control" or event, however titled, shall occur that requires under the High
Yield Indenture a prepayment of the High Yield Notes or an offer to prepay High
Yield Notes as a result of a change in ownership of all or some portion of the
Capital Stock of Company or any of its Subsidiaries or all or substantially all
of the assets of Company and its Subsidiaries.
"CHAPTER 11 CASES" has the meaning assigned to that term in
the recitals to this Agreement.
"CLOSING DATE" means the date on which each of the conditions
described in subsection 4.1 have been satisfied or waived by Administrative
Agent and Requisite Lenders (or such other Lenders as may be required under
subsection 10.6).
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"CLOSING DATE LETTERS OF CREDIT" means the Letters of Credit
issued on or about the Closing Date pursuant to subsection 3.1B(i), consisting
of the Back-Up Closing Date Letters of Credit, the Montgomery Closing Date
Letter of Credit and the Replacement Closing Date Letters of Credit and any
Letters of Credit issued to replace or extend the same pursuant to subsection
3.1B(ii)(a).
"CLOSING DATE MORTGAGED PROPERTY" has the meaning assigned to
that term in subsection 4.1N.
"CLOSING DATE MORTGAGES" has the meaning assigned to that term
in subsection 4.1N.
"CLOSING DATE RETAINED AMOUNT" has the meaning assigned to
that term in subsection 4.1T.
"COLLATERAL" means, collectively, all of the real, personal
and mixed property (including Capital Stock) in which Liens are purported to be
granted pursuant to the Collateral Documents, as security for the Obligations.
"COLLATERAL ACCOUNT" means the cash collateral account
maintained with Collateral Agent pursuant to the Security Agreement to secure
the obligations of Borrowers with respect to Letter of Credit Exposure.
"COLLATERAL AGENT" means Bank of America, in its capacity as
Collateral Agent under the Intercreditor Agreement and the Collateral Documents.
"COLLATERAL DOCUMENTS" means the Security Agreement, the DHC
Pledge Agreement, the Control Agreements, the Mortgages and all other
instruments or documents (pursuant to which a Lien to secure all or any portion
of the Obligations is purported or intended to be created, granted, evidenced or
perfected) delivered from time to time by any Credit Party pursuant to this
Agreement or any of the other Credit Documents, as such instruments and
documents may be amended, restated, supplemented or otherwise modified from time
to time.
"COMMITMENTS" means one or more of the Revolving Loan
Commitments or the Letter of Credit Commitments or any combination thereof.
"COMMITMENT FEE PERCENTAGE" means, on any date of
determination, a per annum rate equal to 0.50%.
"COMMODITIES AGREEMENT" means any long-term or forward
purchase contract or option contract to buy, sell or exchange commodities or
similar agreement or arrangement to which Company or any of its Subsidiaries is
a party unless, under the terms of such contract, option contract agreement or
arrangement Company expects to make or take delivery of the commodities which
are the subject thereof.
-7-
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
"COMPETITOR" means any Person (and its Affiliates) primarily
engaged in the business of (i) the generation and sale of electricity or (ii)
municipal waste management.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit V annexed hereto.
"CONFIRMATION ORDER" means the Findings of Fact, Conclusions
of Law and Order under 11 U.S.C. Section 1129 and Rule 3020 of the Federal Rules
of Bankruptcy Procedure Confirming Debtors' Second Joint Plan of Reorganization
under Chapter 11 of the Bankruptcy Code entered by the Bankruptcy Court on March
5, 2004 in the Chapter 11 Cases, without modification, revision or amendment.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
(i) Consolidated Interest Expense for such period minus (ii) to the extent
included in Consolidated Interest Expense for such period, accretion of
principal on the High Yield Notes, interest paid in kind and not in cash during
such period and any other amounts not paid or payable in cash.
"CONSOLIDATED FACILITIES CAPITAL EXPENDITURES" means, for any
period, the aggregate of all cash expenditures by Company and its Subsidiaries
during that period that, in conformity with GAAP, would be included in
"additions to property, plant or equipment" or comparable items reflected in the
consolidated statement of cash flows of Company and its Subsidiaries for that or
any other period. Expenditures that are reimbursed by the client (if such client
is a Government Authority) of a Project under the principal lease, service or
operating agreement relating to such Project pursuant to a Contractual
Obligation on the part of such client to reimburse such expenditures shall not
constitute Consolidated Facilities Capital Expenditures.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, (i)
total interest expense, net of interest income, of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries to the extent such Indebtedness is or is required to be
reflected on the consolidated balance sheet of Company and its Subsidiaries in
conformity with GAAP, but excluding any Indebtedness consisting of Limited
Recourse Debt, and (ii) to the extent not included in the calculation of the
amount described in clause (i), all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements, but excluding, however, from
clauses (i) and (ii) any amounts referred to in subsection 2.3 payable to
Administrative Agent and Lenders on or before the Closing Date and any amounts
referred to in subsection 2.3 of the Detroit L/C Facility Agreement payable to
the agents and lenders thereunder on or before the Closing Date.
-8-
"CONSOLIDATED LEVERAGE RATIO" means, as at any date of
determination, the ratio of (a) Total Debt as at such date to (b) Adjusted
EBITDA for the four-Fiscal Quarter period most recently ended prior to such
date.
"CONSOLIDATED NET WORTH" means, as at any date of
determination, the sum of the capital stock and additional paid-in capital plus
retained earnings (or minus accumulated deficits) of Company and its
Subsidiaries on a consolidated basis, as such amounts are or are required to be
reflected on the consolidated balance sheet of Company and its Subsidiaries in
conformity with GAAP.
"CONTINGENT OBLIGATION", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Hedge Agreements. Contingent Obligations shall include
(a) the direct or indirect guaranty, endorsement (otherwise than for collection
or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (1) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (2) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (1) or (2) of this
sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the amount
(if stated) of the obligation so guaranteed or otherwise supported or, if less,
the amount to which such Contingent Obligation is specifically limited, or, if
the amount of any Contingent Obligation is not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by
Company in good faith based upon reasonable assumptions. No obligations under
Performance Guaranties shall constitute Contingent Obligations.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"CONTROL AGREEMENT" means an agreement, satisfactory in form
and substance to Administrative Agent and executed by the financial institution
or securities intermediary at which a Deposit Account or a Securities Account,
as the case may be, is
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maintained, pursuant to which such financial institution or securities
intermediary confirms and acknowledges Collateral Agent's security interest in
such account, and agrees that the financial institution or securities
intermediary, as the case may be, will comply with instructions originated by
Collateral Agent as to disposition of funds in such account, without further
consent by Company or any Subsidiary, as such agreement may be amended,
restated, supplemented or otherwise modified from time to time.
"CORPORATE SERVICES REIMBURSEMENT AGREEMENT" means the
corporate services and expense reimbursement agreement entered into by DHC and
Company on the Closing Date, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
thereunder and under subsection 7.12.
"COVANTA ENERGY PENSION PLAN" means the Pension Plan referred
to generally by Company on and prior to the Closing Date as the "Covanta Energy
Pension Plan".
"CPIH" means Covanta Power International Holdings, Inc., a
Delaware corporation, and its successors and assigns.
"CPIH BORROWERS" means CPIH and any additional borrowers under
the CPIH Term Loan Agreement from time to time.
"CPIH REVOLVER AGREEMENT" means that certain credit agreement
dated as of the date hereof by and among CPIH Borrowers, as borrowers, and the
financial institutions listed on the signature pages thereof, as lenders, as
such credit agreement may be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted thereunder and under
subsection 7.12.
"CPIH REVOLVER DOCUMENTS" means the "Loan Documents" as
defined in the CPIH Revolver Agreement.
"CPIH STOCK PLEDGE AGREEMENT" means the pledge agreement dated
as of the Closing Date pursuant to which CEA pledges the Capital Stock of CPIH
to secure the obligations of CPIH Borrowers under the CPIH Revolver Documents
and the CPIH Term Loan Documents, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
thereunder and under subsection 7.12.
"CPIH SUBSIDIARIES" means, on and after the Closing Date, CPIH
and its Subsidiaries.
"CPIH TERM LOAN AGREEMENT" means that certain credit agreement
dated as of the date hereof by and among CPIH Borrowers, the Persons listed on
the signature pages thereof, as lenders, and Bank of America and Deutsche Bank,
as agents for such lenders, as such credit agreement may be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
thereunder and under subsection 7.12.
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"CPIH TERM LOAN DOCUMENTS" means the "Loan Documents" as
defined in the CPIH Term Loan Agreement.
"CREDIT DOCUMENTS" means this Agreement, the Revolving Notes,
the Letters of Credit (and any applications for, or reimbursement agreements or
other documents or certificates executed by Borrowers in favor of Issuing Lender
relating to, the Letters of Credit) and the Collateral Documents, the
Intercreditor Agreement and all amendments, waivers and consents relating
thereto.
"CREDIT EXPOSURE" means, with respect to any Lender, as of any
date of determination, that Lender's Revolving Loan Exposure and Letter of
Credit Exposure.
"CREDIT PARTY" means each Borrower and DHC, and "CREDIT
PARTIES" means all such Persons, collectively.
"CREDIT UTILIZATION" means, on any date of determination, the
sum of (i) the aggregate principal amount of all outstanding Revolving Loans
plus (ii) the aggregate amount of Letter of Credit Usage.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, or option contract to buy, sell or exchange currencies
or other similar agreement or arrangement to which Company or any of its
Subsidiaries is a party.
"D.E. SHAW" means D. E. Shaw Laminar Portfolios, L.L.C. a
Delaware limited liability company.
"DEBTORS" has the meaning assigned to that term in the
recitals to this Agreement.
"DEFAULTED PARTICIPATION" has the meaning assigned to that
term in subsection 2.9.
"DEFAULT EXCESS" has the meaning assigned to that term in
subsection 2.9.
"DEFAULTING LENDER" has the meaning assigned to that term in
subsection 2.9.
"DEFAULT PERIOD" has the meaning assigned to that term in
subsection 2.9.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
similar account maintained with a Person engaged in the business of banking,
including a savings bank, savings and loan association, credit union or trust
company.
"DETROIT L/C FACILITY AGREEMENT" means (i) that certain credit
agreement dated as of the date hereof by and among Borrowers, as borrowers, Bank
of America, as Administrative Agent, the Documentation Agent party thereto, the
Co-Lead Arrangers party thereto, and the financial institutions listed on the
signature pages thereof, as lenders, and (ii) any credit agreement entered into
by Borrowers to refinance, replace, renew or extend, in
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whole or in part, the credit agreement referenced in clause (i) and the
Indebtedness and letters of credit issued thereunder (provided, that (a) the
terms of the Detroit L/C Facility Documents as so refinanced, replaced, renewed
or extended shall not be more disadvantageous to Company and its Subsidiaries
and the Lenders (in a manner deemed material by Administrative Agent) than the
Detroit L/C Facility Documents in effect on the Closing Date (it being
understood and agreed that any refinancing, replacement, renewal or extension
having the effect of reducing, delaying or waiving any otherwise required
reduction in the amount of any commitment to extend letters of credit under the
Detroit L/C Facility Documents shall be deemed to be more disadvantageous for
purposes of this clause (a) without further notice or other action by
Administrative Agent), (b) the aggregate amount of Indebtedness and letters of
credit outstanding and additional commitments to extend credit, if any, under
the Detroit L/C Facility Documents as refinanced, replaced, renewed or extended,
shall not exceed the aggregate amount of the commitments to extend credit in
effect under the Detroit L/C Facility Documents on the Closing Date (or, if
less, the amount of such commitments in effect immediately prior to such
refinancing, replacement, renewal or extension), plus $5,000,000, (c) the credit
available under the Detroit L/C Facility Documents as refinanced, replaced,
renewed or extended shall be limited to letters of credit issuable in connection
with the Project to which the Existing Detroit L/Cs relate (provided, that the
requirements of this clause (c) shall not apply with respect to credit extended
pursuant to the $5,000,000 additional amount described at the end of the
foregoing clause (b)), (d) the obligations under (and the Liens securing) the
Detroit L/C Facility Documents as refinanced, replaced, renewed or extended
shall be subject to the Intercreditor Agreement on terms substantively identical
to the terms applicable to the obligations in effect under the Detroit L/C
Facility Documents in effect on the Closing Date, and (e) Company shall provide
to Administrative Agent reasonable prior advance written notice of such proposed
refinancing, replacement, renewal or extension and copies of all material
contracts or other agreements being entered into in connection therewith), in
the case of clause (i) or (ii) as such credit agreement may be amended,
supplemented or otherwise modified from time to time to the extent permitted
under subsection 7.12.
"DETROIT L/C FACILITY DOCUMENTS" means (i) the Detroit L/C
Facility Agreement, and (ii) the other "Credit Documents" as defined in the
Detroit L/C Facility Agreement.
"DETROIT PROJECT SUBSIDIARY" means Michigan Waste Energy,
Inc., a Delaware corporation.
"DEUTSCHE BANK" means Deutsche Bank Securities, Inc.
"DEVELOPMENT EXPENSE" means, with respect to any Project, cash
expenditures made by Company or any of its Subsidiaries to fund (i) engineering,
permitting, legal, environmental and other similar expenses and (ii) fees and
expenses of consultants and advisers with respect to engineering, permitting,
legal and environmental issues, in each case to the extent such expenses are
payable to Persons other than Company and its Subsidiaries in connection with
any Expansion permitted under this Agreement, prior to the date of financial
closing for such Expansion; provided, that Development Expenses shall exclude
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payroll expense and reasonable travel expenses of employees of Company and its
Subsidiaries.
"DHC" means Danielson Holding Corporation, a Delaware
corporation.
"DHC PLEDGE AGREEMENT" means the DHC Pledge Agreement executed
and delivered on the Closing Date by DHC, substantially in the form of Exhibit
XI annexed hereto, as such DHC Pledge Agreement may thereafter be amended,
restated, supplemented or otherwise modified from time to time.
"DHC TAX SHARING AGREEMENT" means the tax sharing agreement
entered into by DHC, Company and CPIH on the Closing Date, as such agreement may
be amended, restated, supplemented or otherwise modified from time to time to
the extent permitted thereunder and under subsection 7.12.
"DIP AGENTS" means the Persons identified as "Agents" under
the DIP Credit Agreement, in their capacities as agents for DIP Lenders under
the DIP Credit Agreement.
"DIP CREDIT AGREEMENT" means that certain Debtor-In-Possession
Credit Agreement dated as April 1, 2002, by and among Company and certain of its
Subsidiaries, as debtors and debtors-in-possession, the financial institutions
listed on the signature pages thereof, as lenders, and Bank of America and
Deutsche Bank, as agents for such lenders, as such agreement is in effect
immediately prior to the Closing Date.
"DIP CREDIT DOCUMENTS" means the "Loan Documents" as defined
in the DIP Credit Agreement.
"DIP LENDER" means each of the "Lenders" under the DIP Credit
Agreement on the Closing Date, in its capacity as a lender under the DIP Credit
Agreement.
"DIP TRANCHE A L/C" means each letter of credit outstanding as
of the Closing Date that is described on Schedule 1.1A (Part I) annexed to the
Detroit L/C Facility Agreement (setting forth the expiration date, renewal
requirements and other particulars of such letter of credit, including the type
of obligation supported thereby), under which the maximum aggregate available
amount for drawing is $6,276,500.00, determined as of the Closing Date; and "DIP
TRANCHE A L/CS" means all such letters of credit, collectively.
"DIP TRANCHE B L/C" means each letter of credit outstanding as
of the Closing Date that is described on Schedule 1.1A (Part II) annexed to the
Detroit L/C Facility Agreement (setting forth the expiration date, renewal
requirements and other particulars of such letter of credit), under which the
maximum aggregate available amount for drawing is $170,074,145.19, determined as
of the Closing Date; and "DIP TRANCHE B L/CS" means all such letters of credit,
collectively.
"DISTRIBUTABLE CASH" has the meaning assigned to that term in
subsection 4.1T.
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"DOCUMENTATION AGENT" has the meaning assigned to that term in
the introduction to this Agreement and also means and includes any successor
Documentation Agent appointed pursuant to subsection 9.5.
"DOLLARS" and the sign "$" mean the lawful money of the United
States.
"DOMESTIC CASH EQUIVALENTS" means, as at any date of
determination, (i) marketable securities (a) issued or directly and
unconditionally guaranteed as to interest and principal by the United States
Government or (b) issued by any agency of the United States the obligations of
which are backed by the full faith and credit of the United States, in each case
maturing within 30 days after such date; (ii) marketable direct obligations
issued by any state of the United States or any political subdivision of any
such state or any public instrumentality thereof, in each case maturing within
30 days after such date and having, at the time of the acquisition thereof, the
highest rating obtainable from either Standard & Poor's ("S&P") or Moody's
Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no more
than 30 days from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least "A-1" from S&P or at least "P-1" from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within 30
days after such date and issued or accepted by any Lender or by any commercial
bank organized under the laws of the United States or any state thereof or the
District of Columbia that (a) is at least "adequately capitalized" (as defined
in the regulations of its primary Federal banking regulator) and (b) has Tier 1
capital (as defined in such regulations) of not less than $100,000,000; (v)
shares of any money market mutual fund that (a) has at least 95% of its assets
invested continuously in the types of investments referred to in clauses (i) and
(ii) above, (b) has net assets of not less than $500,000,000, and (c) has the
highest rating obtainable from either S&P or Moody's; and (vi) such other
securities as Company and Administrative Agent may agree on from time to time.
"DOMESTIC SUBSIDIARY" means any Subsidiary of any Borrower
that is incorporated or organized under the laws of the United States, any state
thereof or in the District of Columbia.
"ELIGIBLE ASSIGNEE" means (i) any Person that is (a) a
commercial bank organized under the laws of the United States or any state
thereof, (b) a savings and loan association or savings bank organized under the
laws of the United States or any state thereof, (c) a commercial bank organized
under the laws of any other country or a political subdivision thereof,
provided, that (1) such bank is acting through a branch or agency located in the
United States or (2) such bank is organized under the laws of a country that is
a member of the Organization for Economic Cooperation and Development or a
political subdivision of such country, or (d) any other financial institution
that extends credit or buys loans as one of its businesses; (ii) any Person that
is a Lender at the time of the relevant assignment; or (iii) any other Person
designated as an Eligible Assignee pursuant to the prior written consent of
Administrative Agent in its sole discretion; provided, that none of Company nor
any Affiliate of Company nor any Competitor shall be an Eligible Assignee; and
provided, further, that in order to be an Eligible Assignee, a Person must have
at the time
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of determination a long term senior unsecured debt rating of "A2" or better from
Moody's and/or "A" or better from S&P.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is maintained or contributed to by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.
"ENFORCING LENDERS" has the meaning assigned to that term in
subsection 10.5B.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Government Authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, or (ii) in connection with any
actual or alleged damage, injury, threat or harm to health, safety, natural
resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of any Government
Authority relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage, transportation
or disposal of Hazardous Materials, or (iii) occupational safety and health,
industrial hygiene, land use or the protection of human, plant or animal health
or welfare, in any manner applicable to Company or any of its Subsidiaries
(including, solely with respect to periods prior to the Closing Date, CPIH
Subsidiaries) or any Facility.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation that is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) that is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation) that would reasonably be
expected to have a Material Adverse Effect; (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with
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Section 412(d) of the Internal Revenue Code) or the imposition of a Lien on the
property of Company or any of its Subsidiaries pursuant to Section 412(n) of the
Internal Revenue Code, except any such failure or imposition attributable to an
error made in good faith which results in the imposition of liability or a Lien
on Company and its Subsidiaries and their respective ERISA Affiliates of an
immaterial amount, so long as such error, failure and imposition are promptly
corrected after discovery of such error by Company or any of its Subsidiaries,
or the failure to make by its due date a required installment of a material
amount under Section 412(m) of the Internal Revenue Code with respect to any
Pension Plan or the failure to make any required contribution of a material
amount to a Multiemployer Plan; (iii) the provision by the administrator of any
Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to
terminate such plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the withdrawal by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates from any Pension Plan with two or more contributing
sponsors or the termination of any such Pension Plan resulting in material
current liability of Company or any of its Subsidiaries (including CPIH
Subsidiaries, to the extent such CPIH Subsidiaries are ERISA Affiliates of
Company or any of its Subsidiaries) pursuant to Section 4063 or 4064 of ERISA;
(v) the institution by the PBGC of proceedings to terminate any Pension Plan, or
the occurrence of any event or condition that would reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; (vi) the imposition of
material current liability on Company, any of its Subsidiaries or any of their
respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by
reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal of
Company, any of its Subsidiaries or any of their respective ERISA Affiliates in
a complete or partial withdrawal (within the meaning of Sections 4203 and 4205
of ERISA) from any Multiemployer Plan if it would reasonably be expected that
Company or any of its Subsidiaries will incur material liability therefor (in
excess of the contribution that would otherwise have been due absent such
withdrawal), or the receipt by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated under Section 4041A or 4042 of ERISA;
(viii) the assertion of a material claim (other than routine claims for
benefits) against any Employee Benefit Plan other than a Multiemployer Plan or
the assets thereof, or against Company, any of its Subsidiaries or any of their
respective ERISA Affiliates in connection with any Employee Benefit Plan, if
such assertion or the liability with respect thereto would reasonably be
expected to have a Material Adverse Effect; (ix) receipt from the Internal
Revenue Service of notice of the failure of any Pension Plan (or any other
Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or of the failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal Revenue Code,
in either case if such failure would reasonably be expected to have a Material
Adverse Effect; or (x) the imposition of a Lien on the property of Company or
any of its Subsidiaries pursuant to Section 401(a)(29) of the Internal Revenue
Code or pursuant to ERISA with respect to any Pension Plan.
-16-
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar
Loan for the relevant Interest Period, the applicable British Bankers'
Association LIBOR rate for deposits in U.S. dollars as reported by any generally
recognized financial information service as of 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, and having a
maturity equal to such Interest Period, provided that, if no such British
Bankers' Association LIBOR rate is available to Administrative Agent, the
applicable Eurodollar Base Rate for the relevant Interest Period shall instead
be the rate determined by Administrative Agent to be the rate at which Bank One
or one of its Affiliate banks offers to place deposits in U.S. dollars with
first-class banks in the interbank market at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, in the
approximate amount of Bank One's relevant Eurodollar Loan and having a maturity
equal to such Interest Period.
"EURODOLLAR RATE" means, with respect to a Eurodollar Loan for
the relevant Interest Period the quotient of (i) the Eurodollar Base Rate
applicable to such Interest Period, divided by (ii) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period.
"EURODOLLAR RATE LOANS" means Revolving Loans bearing interest
at rates determined by reference to the Eurodollar Rate as provided in
subsection 2.2A.
"EURODOLLAR RATE MARGIN" means six and one-half of one percent
(6.50%).
"EVENT OF DEFAULT" has the meaning assigned to that term in
Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXCLUDED SUBSIDIARY" means (i) each Subsidiary of Company for
which becoming a Borrower would constitute a material violation of (a) a valid
and enforceable Contractual Obligation in favor of a Person other than Company
or any of its Subsidiaries for which the required consents have not been
obtained or (b) applicable law affecting such Subsidiary, provided, that any
such Subsidiary of Company shall cease to be covered under this clause at such
time as such Subsidiary's becoming a Borrower would no longer constitute a
material violation of such Contractual Obligation or applicable law, whether as
a result of obtaining the required consents or otherwise, and (ii) each Bankrupt
Subsidiary.
"EXISTING DETROIT L/CS" means, collectively, the following DIP
Tranche B L/Cs: (i) Irrevocable Standby Letter of Credit Number SBY501806 issued
by UBS Bank, in the available amount of $96,731,392.81 as of the Closing Date,
for the benefit of PMCC Leasing Corporation and Resource Recovery Business
Trust-A, and (ii) Irrevocable Standby Letter of Credit Number SBY501835 issued
by UBS Bank, in the available amount of $41,460,161.38 as of the Closing Date,
for the benefit of Aircraft Services Corporation and Resource Recovery Business
Trust-B.
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"EXISTING INTERCREDITOR AGREEMENT" means the "Intercreditor
Agreement" as defined in the DIP Credit Agreement on the Closing Date, as such
"Intercreditor Agreement" is in effect on the Closing Date.
"EXISTING IPP INTERNATIONAL PROJECT GUARANTIES" means,
collectively, (i) the existing guaranty by Covanta Energy Group of the
obligations of the CPIH Subsidiaries under certain agreements relating to the
Haripur Project, the Samalpatti Project and the Trezzo Project, (ii) the
existing guaranty by Covanta Projects, Inc. of the obligations of the CPIH
Subsidiaries under certain agreements relating to the Quezon Project, and (iii)
the existing guaranty by Company of the obligations of the CPIH Subsidiaries
under certain agreements relating to the Balaji/Madurai Project and the LICA
Project, as each such guaranty may be amended, restated, supplemented or
otherwise modified to the extent permitted hereunder.
"EXPANSION" means, with respect to any waste-to-energy Project
in existence as of the date hereof, additions or improvements to the existing
facilities of such Project that involve the addition of a boiler or a turbine
generator.
"FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by any Borrower or any of its
Subsidiaries, by any of their respective predecessors or by any Person who was
an Affiliate of Borrower or any of its Subsidiaries prior to the Closing Date.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations at approximately 10:00 a.m. (Chicago time) for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"FIFRA" means the Federal Insecticide, Fungicide, and
Rodenticide Act, as amended (7 U.S.C. Section 136 et seq.), or any successor
statute, and all implementing regulations promulgated thereunder.
"FIRST PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that (i) such
Lien is perfected and has priority over any other Lien on such Collateral (other
than Liens permitted pursuant to subsections 7.2A(iii) through (xi)) and (ii)
such Lien is the only Lien (other than Liens permitted pursuant to subsection
7.2) to which such Collateral is subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
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"FISCAL YEAR" means the fiscal year of Company and its
Subsidiaries ending on December 31st of each calendar year.
"FLOOD HAZARD PROPERTY" means any real property that is
subject to a Mortgage and is located in an area designated by the Federal
Emergency Management Agency as having special flood or mud slide hazards.
"FOREIGN SUBSIDIARY" means any Subsidiary of any Borrower that
is not a Domestic Subsidiary.
"FUND" means any Person (other than a natural Person) that is
(or will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.
"FUNDING AND PAYMENT OFFICE" means (i) the office of
Administrative Agent located at 120 South LaSalle Street, 8th Floor, Mail Code
L1-1713, Chicago, Illinois 60603 or (ii) such other office of Administrative
Agent as may from time to time hereafter be designated as such in a written
notice delivered by Administrative Agent to Company and each Lender.
"FUNDING BORROWER" has the meaning assigned to that term in
subsection 2.10C.
"FUNDING DATE" means the date of funding of a Revolving Loan.
"FUNDING DEFAULT" has the meaning assigned to that term in
subsection 2.9.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, accounting principles generally accepted in
the United States set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as are approved by the American
Institute of Certified Public Accountants.
"GEOTHERMAL SALE" means (i) the sale or other disposition by
Company and its Subsidiaries of all or substantially all of their respective (1)
Capital Stock in Heber Geothermal Company, Heber Field Company and Second
Imperial Geothermal Company, L.P. and (2) Capital Stock in non-debtor Affiliate
Mammoth Pacific L.P., which entities own or lease geothermal plants and
facilities in California (the "GEOTHERMAL BUSINESS") and (ii) the assumption
and/or assignment by Company and its Subsidiaries of certain contracts related
to the Geothermal Business, in the case of both clauses (i) and (ii) occurring
prior to or concurrently with the consummation of the Plan of Reorganization.
"GOVERNING BODY" means the board of directors or other body
having the power to direct or cause the direction of the management and policies
of a Person that is a corporation, partnership, trust or limited liability
company.
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"GOVERNMENT AUTHORITY" means any political subdivision or
department thereof, any other governmental or regulatory body, commission,
central bank, board, bureau, organ or instrumentality or any court, in each case
whether federal, state, local or foreign.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
registration, authorization, plan, directive, consent, order or consent decree
of or from, or notice to, any Government Authority.
"GREENWAY L/C" means, collectively, the letter of credit
outstanding on the Closing Date in the stated amount of $820,000 issued under
the DIP Credit Agreement as a "Tranche B Letter of Credit" (as defined in the
DIP Credit Agreement), and shall not mean or include any amendment, reissuance,
renewal or extension of such letter of credit after the Closing Date.
"GROSS RECEIPTS" means, in respect of any Asset Sale, the
total cash payments (including any cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) received from such Asset Sale minus any repayment of debt
related to the assets sold in such Asset Sale which is made in connection
therewith and is not prohibited under this Agreement.
"HAVERHILL DEFERRED INCOME" means, for any period, all
non-cash income resulting from payments made in 1998 by the counterparty to the
power purchase agreement relating to the Haverhill Project in order to "buydown"
its obligations under such agreement, to the extent such non-cash income is
included in consolidated revenue or consolidated earnings of Company and its
Subsidiaries during such period.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of (a) "hazardous
wastes" or "mixed wastes" as defined in RCRA or in any other Environmental Law;
(b) "hazardous substances", "pollutants" or "contaminants" as defined in CERCLA
or in any other Environmental Law; (c) "chemical substances" or "mixtures" as
defined in TSCA or any other substance which is tested pursuant to TSCA or any
other Environmental Law, or the manufacture, processing, distribution, use or
disposal of which is regulated or prohibited pursuant to TSCA or any other
Environmental Law, including without limitation polychlorinated biphenyls and
electrical equipment which contains any oil or dielectric fluid containing
regulated concentrations of polychlorinated biphenyls; (d) "insecticides",
"fungicides", "pesticides" or "rodenticides" as defined in FIFRA or any other
Environmental Law; or (e) "infectious waste" or "biohazardous waste" as defined
in any Environmental Law; (ii) asbestos or any asbestos-containing materials;
(iii) urea formaldehyde foam insulation; (iv) any oil, petroleum, petroleum
fraction or petroleum derived substance; (v) any drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (vi) any flammable
substances or explosives; (vii) any radioactive materials; and (viii) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any Government Authority or which may or could pose a hazard to the
health and safety of the owners,
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occupants or any Persons in the vicinity of any Facility or to the indoor or
outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current,
proposed or threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment,
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with respect
to any of the foregoing.
"HEDGE AGREEMENT" means (i) an Interest Rate Agreement or a
Currency Agreement designed to hedge against fluctuations in interest rates or
currency values, respectively, or (ii) a forward agreement or arrangement
designed to hedge against fluctuation in electricity rates pertaining to
electricity produced by a Project, so long as the contractual arrangements
relating to such Project contemplate that Company or its Subsidiaries shall
deliver such electricity to third parties.
"HIGH YIELD INDENTURE" means (i) the indenture pursuant to
which the High Yield Notes are issued and (ii) any replacement indenture entered
into in connection with a refinancing, renewal, replacement or extension of the
High Yield Notes permitted under subsection 7.1(xiii), in each case as such
indenture or replacement indenture may be amended, restated, supplemented or
otherwise modified from time to time to the extent permitted under subsection
7.12.
"HIGH YIELD NOTES" means (i) the $230,000,000 in aggregate
principal amount at maturity of 8.25% Senior Notes due 2010 of Company issued
pursuant to the High Yield Indenture, and (ii) any Indebtedness incurred to
refinance, renew, replace or extend the High Yield Notes permitted to be
incurred under subsection 7.1(xiii); provided, that the initial principal amount
(and issue price) of such High Yield Notes on the Closing Date shall be
$205,000,000.
"IMMATERIAL FOREIGN SUBSIDIARY" means any of the following
Foreign Subsidiaries, in each case so long as such Subsidiary (i) has engaged in
substantially no business or operations in the most recent fiscal year of
Company and its Subsidiaries, (ii) in the most recent fiscal year of Company and
its Subsidiaries, accounted for less than $100,000 of revenues, and (iii) holds
at the time of determination less than $100,000 of assets: Covanta Energy
Europe, Ltd. (United Kingdom), OPI Carmona Ltd. (Cayman Islands), OPI Carmona
One Ltd. (Cayman Islands), and Covanta Waste to Energy Asia Investments
(Mauritius).
"INDEBTEDNESS", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred
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purchase price of property or services received by such Person (excluding any
such obligations incurred under ERISA), which purchase price is (a) due more
than six months from the date of incurrence of the obligation in respect thereof
or (b) evidenced by a promissory note or similar written instrument, but
excluding in either case current trade payables incurred in the ordinary course
of business and payable in accordance with customary practices, (v) Synthetic
Lease Obligations, and (vi) all indebtedness secured by any Lien on any property
or asset owned by that Person regardless of whether the indebtedness secured
thereby shall have been assumed by that Person or is nonrecourse to the credit
of that Person. Any obligations under Interest Rate Agreements and Currency
Agreements (and Hedge Agreements that protect against fluctuation in electricity
rates) constitute (1) in the case of Hedge Agreements, Contingent Obligations,
and (2) in all other cases, Investments, and in neither case constitute
Indebtedness. For purposes of this Agreement, the Indebtedness of any Person
shall include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer, unless the Indebtedness of such
partnership or joint venture is expressly Limited Recourse Debt of such
partnership or joint venture.
"INDEMNIFIED LIABILITIES" has the meaning assigned to that
term in subsection 10.3.
"INDEMNITEE" has the meaning assigned to that term in
subsection 10.3.
"INSURANCE PREMIUM FINANCERS" means Persons who are
non-Affiliates of Company that advance insurance premiums for Company and its
Subsidiaries pursuant to Insurance Premium Financing Arrangements.
"INSURANCE PREMIUM FINANCING ARRANGEMENTS" means,
collectively, such agreements as Company and its Subsidiaries shall enter into
after the Closing Date with Insurance Premium Financers pursuant to which such
Insurance Premium Financers shall advance insurance premiums for Company and its
Subsidiaries. Such Insurance Premium Financing Arrangements (i) shall provide
for the benefit of such Insurance Premium Financers a security interest in no
property of Company or any of its Subsidiaries other than gross unearned
premiums for the insurance policies, (ii) shall not purport to prohibit any
portion of the Liens created in favor of Collateral Agent (for the benefit of
Secured Parties) pursuant to the Collateral Documents, and (iii) shall not
contain any provision or contemplate any transaction prohibited by this
Agreement and shall otherwise be in form and substance reasonably satisfactory
to Administrative Agent.
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, software, know-how and processes used in or
necessary for the conduct of the business of Borrowers and their Subsidiaries as
currently conducted that are material to the condition (financial or otherwise),
business or operations of Borrowers and their Subsidiaries, taken as a whole.
"INTERCOMPANY MASTER NOTE" means a promissory note evidencing
Indebtedness of Company and each of its Subsidiaries which (a) to the extent the
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Indebtedness evidenced thereby is owed to any Borrower, is pledged pursuant to
the Collateral Documents, and (b) to the extent the Indebtedness evidenced
thereby is owed by a Subsidiary of Company, is senior Indebtedness of such
Subsidiary (except to the extent that requiring such Indebtedness to be senior
would breach a contractual obligation binding on such Subsidiary), except that
any such Indebtedness owed by any Borrower to any Subsidiary which is not a
Borrower shall be subordinated in right of payment to the payment in full of the
Obligations pursuant to the terms of such note.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor
Agreement executed and delivered on the Closing Date by Credit Parties, Lenders,
Administrative Agent, Collateral Agent, the agents and the lenders under the
Detroit L/C Facility Documents, the Investor Parties and the trustee under the
High Yield Indenture, in the form of Exhibit XIII annexed hereto, as it may
thereafter be amended, restated, supplemented or otherwise modified from time to
time.
"INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, the last Business Day of each month, commencing on the first such
date to occur after the Closing Date and (ii) with respect to any Eurodollar
Rate Loan, the last day of each Interest Period applicable to such Eurodollar
Rate Loan.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which any Borrower or any of Subsidiary of
any Borrower is a party.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.
"INTER-LENDER AGREEMENT" means that certain Inter-Lender
Agreement of even date herewith among Administrative Agent, Lenders and Issuing
Lender, as the same may be amended from time to time in accordance with its
terms.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Company), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Company from any Person other than
Company or any of its Subsidiaries, of any equity Securities of such Subsidiary,
(iii) any direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
Company or any of its Subsidiaries to any other Person, including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales or services to that other Person in the
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ordinary course of business, (iv) Interest Rate Agreements or Currency
Agreements not constituting Hedge Agreements, (v) Commodities Agreements not
constituting Hedge Agreements, or (vi) any Expansion of any Project by Company
or any of its Subsidiaries to the extent that the costs of such Expansion are
borne, directly or indirectly, by Company or any of its Subsidiaries. The amount
of any Investment shall be the original cost of such Investment plus the cost of
all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
No account receivable owed by a Person to Company or any of its Subsidiaries
that on the relevant date of determination constitutes a current asset and arose
from sales or services to such Person in the ordinary course of business shall
constitute an Investment on such date.
"INVESTOR PARTIES" means D.E. Shaw, SZ Investments, L.L.C., a
Delaware limited liability company, and Third Avenue Trust, on behalf of the
Third Avenue Value Fund Series
"IP COLLATERAL" means, collectively, the Intellectual Property
that constitutes Collateral.
"IPP INTERNATIONAL BUSINESS" means the assets and operations
of the business of Company and its Subsidiaries referred to by Company as the
"IPP International business" prior to the Closing Date, including the Haripur
Project, the Samalpatti Project, the Trezzo Project, the Quezon Project, the
Balaji/Madurai Project, the Linasa Project, the Don Pedro Project, the Rio
Volcan Project, the Bataan Project, the Magellan Project, the Linan Project, the
Huantai Project, the Yanjiang Project and the Island Power Project.
"IPP INTERNATIONAL SALES" means one or more sales or
dispositions of (i) the assets and/or operations of CPIH and its Subsidiaries
and/or (ii) the Capital Stock of CPIH or any of its Subsidiaries.
"ISSUING LENDER" means Bank One, in its capacity as Issuing
Lender and any successor Issuing Lender hereunder.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form.
"JPMORGAN" means J.P. Morgan Chase Bank, NA.
"LAKE SUBSIDIARY" means Covanta Lake II, Inc., a Florida
corporation.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any
Leasehold Property, a letter, certificate or other instrument in writing from
the lessor under the related lease, satisfactory in form and substance to
Administrative Agent, pursuant to which such lessor agrees, for the benefit of
Administrative Agent, (i) that without any further consent of such lessor or any
further action on the part of the Borrower holding such Leasehold Property, such
Leasehold Property may be encumbered pursuant to a Mortgage and may be assigned
to the purchaser at a foreclosure sale or in a transfer in lieu of such a sale
(and to a subsequent third party assignee if Administrative Agent, any Lender,
or an Affiliate of either
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so acquires such Leasehold Property), (ii) that such lessor shall not terminate
such lease as a result of a default by such Borrower thereunder without first
giving Administrative Agent notice of such default and at least 60 days (or, if
such default cannot reasonably be cured by Administrative Agent within such
period, such longer period as may reasonably be required) to cure such default,
and (iii) to such other matters relating to such Leasehold Property and the
Collateral located thereon as Administrative Agent may reasonably request.
"LEASEHOLD PROPERTY" means any leasehold interest of any
Borrower as lessee under any lease of real property.
"LENDER" and "LENDERS" means the Persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and permitted assigns pursuant to subsection 10.1.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means (i) letters of
credit issued under this Agreement by Issuing Lender pursuant to subsection 3.1
and (ii)(a) letters of credit issued by Issuing Lender to replace Closing Date
Letters of Credit pursuant to subsection 3.1B(ii)(a) and (b) amendments to
Letters of Credit issued by Issuing Lender to extend the expiration date of such
Letters of Credit pursuant to subsection 3.1B(ii)(a).
"LETTER OF CREDIT COMMITMENT" means the commitment of a Lender
to purchase and fund participations in Letters of Credit pursuant to Section 3,
and "LETTER OF CREDIT COMMITMENTS" means such commitments of all Lenders in the
aggregate.
"LETTER OF CREDIT EXPOSURE" means, with respect to any Lender
as of any date of determination, the sum of (a) in the event that Lender is the
Issuing Lender, the aggregate Letter of Credit Usage in respect of all Letters
of Credit issued by that Lender (in each case net of any participations
purchased by other Lenders in such Letters of Credit or in any drawings
thereunder not theretofore reimbursed by Borrowers) plus (b) the aggregate
amount of all participations purchased by that Lender in any other outstanding
Letters of Credit or any drawings under any such other Letters of Credit not
theretofore reimbursed by Borrowers.
"LETTER OF CREDIT LENDER" means any Lender having or holding
Letter of Credit Exposure.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding plus (ii) the aggregate amount of all drawings under all
Letters of Credit honored by Issuing Lender and not theretofore reimbursed by
Borrowers.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest)
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and any option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"LIMITED RECOURSE DEBT" means, with respect to any Subsidiary
of Company, Indebtedness of such Subsidiary with respect to which the recourse
of the holder or obligee of such Indebtedness is limited to (i) assets
associated with the Project (which in any event shall not include assets held by
any Borrower other than a Borrower, if any, whose sole business is the ownership
and/or operation of such Project and substantially all of whose assets are
associated with such Project) in respect of which such Indebtedness was incurred
and/or (ii) such Subsidiary or the equity interests in such Subsidiary, but in
the case of clause (ii) only if such Subsidiary's sole business is the ownership
and/or operation of such Project and substantially all of such Subsidiary's
assets are associated with such Project. For purposes of this Agreement,
Indebtedness of a Subsidiary of Company shall not fail to be Limited Recourse
Debt solely by virtue of the fact that the holders of such Limited Recourse Debt
have recourse to Company or another Subsidiary of Company pursuant to a
Contingent Obligation supporting such Limited Recourse Debt or a Performance
Guaranty, so long as such Contingent Obligation or Performance Guaranty is
permitted under subsection 7.4 of this Agreement.
"MANAGEMENT SERVICES AND REIMBURSEMENT AGREEMENT" means the
management services and reimbursement agreement entered into by CPIH, Company
and certain of their respective Subsidiaries on the Closing Date, in form and
substance satisfactory to Administrative Agent, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time to the
extent permitted thereunder and under subsection 7.12.
"MANDATORY PAYMENT" means any amount described in subsections
2.4A(iii)(a)-(g) to be applied as a prepayment of the Revolving Loans, as a
permanent reduction of the Commitments, to repay funded amounts under Letters of
Credit and/or to cash collateralize Letter of Credit Exposure, in each case as
determined pursuant to subsection 2.4A.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Borrowers, taken as a whole, or Company and its
Subsidiaries, taken as a whole, or (ii) the impairment of the ability of Credit
Parties taken as a whole to perform, or of Administrative Agent or Lenders to
enforce, the Obligations.
"MATERIAL CONTRACT" means (i) the principal lease agreement,
if any, and the principal service or operating agreement, if any, with respect
to each waste-to-energy Project and the principal lease agreement, if any, with
respect to each independent power plant Project to which Company or any of its
Subsidiaries is a party, each of which is in existence as of the Closing Date
and is described on Schedule 1.1B annexed hereto, and (ii) any other
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contract or other arrangement to which Company or any of its Subsidiaries is a
party (other than the Credit Documents) for which breach, nonperformance,
cancellation or failure to renew would reasonably be expected to have a Material
Adverse Effect.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property
reasonably determined by Administrative Agent to be of material value as
Collateral or of material importance to the operations of Company or any of its
Subsidiaries.
"MATERIAL SUBSIDIARY" means, with respect to any Person, any
Subsidiary of such Person now existing or hereafter acquired or formed by such
Person which, on a consolidated basis for such Subsidiary and all of its
Subsidiaries, (i) for the most recent fiscal year of such Person accounted for
more than 1% of the consolidated revenues of such Person and its Subsidiaries,
(ii) as at the end of such fiscal year, was the owner of more than 1% of the
consolidated assets of such Person and its Subsidiaries, or (iii) is capitalized
with more than $500,000 of equity.
"MATURITY DATE" means March 10, 2009.
"MONTGOMERY CLOSING DATE LETTER OF CREDIT" means the Closing
Date Letter of Credit issued by Issuing Lender and confirmed by JPMorgan that
supports obligations of Company under the Montgomery Service Agreement and any
Letter of Credit issued to replace or extend the same pursuant to subsection
3.1B(ii)(a).
"MONTGOMERY SERVICE AGREEMENT" means that certain Service
Agreement between Northeast Maryland Waste Disposal Authority and Covanta
Montgomery, Inc. (formerly known as Ogden Martin Systems of Montgomery, Inc.)
dated November 16, 1990, as such agreement is in effect on the Closing Date and
as it may thereafter be amended, restated, supplemented or otherwise modified
from time to time to the extent permitted thereunder.
"MORTGAGE" means (i) a security instrument (whether designated
as a deed of trust or a mortgage or by any similar title) executed and delivered
by any Borrower, substantially in the form of Exhibit XIV annexed hereto or in
such other form as may be approved by Administrative Agent in its sole
discretion, in each case with such changes thereto as may be recommended by
Administrative Agent's local counsel based on local laws or customary local
mortgage or deed of trust practices, or (ii) at Administrative Agent's option,
in the case of any real property or Material Leasehold Property that is the
subject of subsection 6.9, an amendment to an existing Mortgage, in form
satisfactory to Administrative Agent, in either case as such security instrument
or amendment may be amended, restated, supplemented or otherwise modified from
time to time. "MORTGAGES" means all such instruments collectively, whether
executed as of or subsequent to the Closing Date.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan that is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
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"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, Gross Receipts received from such Asset Sale, net of any bona fide direct
costs incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable prior to the earlier of (a) the date
which is eighteen months from the date of such Asset Sale and (b) the Maturity
Date as a result of any gain recognized in connection with such Asset Sale, (ii)
additional Taxes actually payable upon the closing of such Asset Sale (including
any transfer Taxes or Taxes on gross receipts), (iii) actual, reasonable and
documented out-of-pocket fees and expenses (including reasonable legal fees,
reasonable fees to advisors and severance costs that are due (pursuant to a
Contractual Obligation, or written employment policy applicable to terminated
employees generally, of Company or any of its Subsidiaries in effect prior to
such Asset Sale or pursuant to applicable law) and payable immediately upon
consummation of such Asset Sale to employees of Company and its Subsidiaries
that are terminated as a result thereof) paid to Persons other than Company and
its Subsidiaries and their respective Affiliates in connection with such Asset
Sale (including fees necessary to obtain any required consents of such Persons
to such Asset Sale), and (iv) payment of the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness that is (x) secured
by a valid, enforceable and perfected Lien on the stock or assets in question
that is permitted under subsection 7.2 and (y) required to be repaid under the
terms of such Indebtedness as a result of such Asset Sale (without duplication
of amounts deducted in calculating the Gross Receipts from such Asset Sale) and
is permitted to be paid under the Credit Documents.
"NET DEPRECIATION AND AMORTIZATION EXPENSE" means, for any
period, (i) the sum of the amounts (each expressed as a positive number) for
such period of "Depreciation" and "Amortization", as each such line item is
reflected in Company's consolidated statement of cash flows prepared in
conformity with GAAP and reported in a manner consistent with Company's
reporting of such amount in its quarterly or annual report (as the case may be)
on Form 10Q or 10K, respectively, prior to the Closing Date, whether such line
items are so titled or otherwise titled, minus (iii)Haverhill Deferred Income.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any cash payments
or proceeds received by Company or any of its Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of (a)
income taxes reasonably estimated to be actually payable prior to the earlier of
(1) the date which is eighteen months from the date of such receipt and (2) the
Maturity Date as a result of the receipt of such payments or proceeds and (b)
any actual, reasonable and documented out-of-pocket fees and expenses (including
reasonable legal fees, reasonable fees to advisors and severance costs that are
due (pursuant to a Contractual Obligation, or written employment policy
applicable to terminated employees generally, of Company or any of its
Subsidiaries in effect prior to the event causing or relating to the payment
referred to in clause (i) or (ii) above or pursuant to applicable law) and
payable on or prior to the receipt of such payment or proceeds to employees of
Company and its Subsidiaries that have
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been terminated as a result of the relevant loss, taking or sale) paid to
Persons other than Company and its Subsidiaries and their respective Affiliates
in connection with the relevant loss, taking or sale or the adjustment or
settlement of any claims of Company or such Subsidiary in respect thereof;
provided, however, that Net Insurance/Condemnation Proceeds shall be reduced in
an amount equal to the amount of proceeds Subsidiaries of Company are legally
bound or required, pursuant to agreements in effect on the Closing Date, or
which were entered into after the Closing Date with respect to the financing or
acquisition of a Project, to use for purposes other than a Mandatory Payment.
"NET INDEBTEDNESS PROCEEDS" means the cash proceeds (net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith (including reasonable legal fees and expenses)) from the
incurrence of Indebtedness by Company or any of its Subsidiaries.
"9.25% DEBENTURES" means the "9.25% Debenture Claims" as such
term is defined in the Plan of Reorganization.
"NON-BORROWER CASH FLOW" means, for any period with respect to
Subsidiaries of Company that are not Borrowers, (i) the aggregate amount of cash
from such Subsidiaries paid as dividends or otherwise distributed to Borrowers,
minus (ii) the aggregate amount of cash expenditures made by such Subsidiaries
from amounts received from Borrowers to fund operations and capital expenditures
of such Subsidiaries (whether such amounts are received from Borrowers as the
proceeds of Indebtedness incurred by such non-Borrower Subsidiary or as the
proceeds of equity contributions or both). Amounts included in the calculation
of the Development Expenses with respect to a Project shall not be included in
the calculation of clause (ii) of Non-Borrower Cash Flow.
"NON-US LENDER" means a Lender that is organized under the
laws of any jurisdiction other than the United States or any state or other
political subdivision thereof.
"NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit I annexed hereto.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit IV annexed hereto.
"OBLIGATIONS" means all obligations of every nature of Credit
Parties under the Credit Documents, including any liability of such Credit Party
on any claim arising out of or relating to the Credit Documents, whether or not
the right to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed or contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any bankruptcy, insolvency,
reorganization or other similar proceeding. Without limiting the generality of
the foregoing, the Obligations of the Credit Parties under the Credit Documents
include (a) the obligation to pay principal, interest (including all interest
which accrues after the commencement of any case or proceeding in bankruptcy
after the insolvency of, or for the reorganization of, any Credit
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Party, whether or not allowed in such case or proceeding), charges, expenses,
fees, attorneys' fees and disbursements, indemnities and other amounts payable
by any Borrower and any other Credit Party under any Credit Document and (b) the
obligation to reimburse any amount in respect of any of the foregoing that
Administrative Agent or any Lender, in its sole discretion, may elect to pay or
advance on behalf of such Borrower or other Credit Party; provided, that nothing
in this definition shall be construed as creating any obligations of DHC under
the Credit Documents that are not expressly set forth in such Credit Documents.
"OFFICER" means the president, chief executive officer, a vice
president, chief financial officer, treasurer, general partner (if an
individual), managing member (if an individual) or other individual appointed by
the Governing Body or the Organizational Documents of a corporation,
partnership, trust or limited liability company to serve in a similar capacity
as the foregoing.
"OFFICER'S CERTIFICATE" means, as applied to any Person that
is a corporation, partnership, trust or limited liability company, a certificate
executed on behalf of such Person by one or more Officers of such Person or one
or more Officers of a general partner or a managing member if such general
partner or managing member is a corporation, partnership, trust or limited
liability company; provided, that any Officer's Certificate delivered pursuant
to subsection 2.4A(iii)(h) or 6.1(v) shall be executed by a senior financial
officer of Company reasonably acceptable to Administrative Agent.
"ORGANIZATIONAL DOCUMENTS" means the documents (including
Bylaws, if applicable) pursuant to which a Person that is a corporation,
partnership, trust or limited liability company is organized.
"PARTICIPANT" means a purchaser of a participation in the
rights and obligations under this Agreement pursuant to subsection 10.1C.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to section 412 of the Internal Revenue Code
or section 302 of ERISA.
"PERFORMANCE GUARANTY" means any agreement entered into by
Company or any of its Subsidiaries under which Company or any such Subsidiary
guarantees the performance of a Subsidiary of Company under a principal lease,
service or operating agreement relating to a Project. The Existing IPP
International Project Guaranties shall not constitute Performance Guaranties.
"PERMANENT L/C OBLIGATION REDUCTION" means a cancellation,
termination or reduction in the amount of any Closing Date Letter of Credit
(including any such reduction, cancellation or termination resulting from a
drawing under such Closing Date Letter of
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Credit) issued on the Closing Date, other than such a cancellation, termination
or reduction (i) in the amount of the Montgomery Closing Date Letter of Credit
not resulting from a drawing under such Letter of Credit or (ii) concurrently
with a reissuance of the relevant cancelled, terminated or reduced portion of
the applicable Closing Date Letter of Credit pursuant to subsection 3.1B(ii)(a).
Notwithstanding the foregoing, any scheduled reduction in the stated amount of
any Closing Date Letter of Credit shall be a Permanent L/C Obligation Reduction
only to the extent the maximum amount available for drawing at any time
thereafter under such Closing Date Letter of Credit is permanently reduced.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien expressly prohibited
by any applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by subsection
6.3;
(ii) statutory Liens of landlords, statutory Liens and rights
of set-off of banks, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed
by law, in each case incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and
that (in the case of any such amounts overdue for a period in excess of
5 days) are being contested in good faith by appropriate proceedings,
so long as (1) such reserves or other appropriate provisions, if any,
as shall be required by GAAP shall have been made for any such
contested amounts, and (2) in the case of a Lien with respect to any
portion of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral on account of
such Lien;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, trade contracts, performance and
return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money), so long as no
foreclosure, sale or similar proceedings have been commenced with
respect to any portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 8.8;
(v) leases or subleases granted to third parties in accordance
with any applicable terms of the Collateral Documents and not
interfering in any material respect with the ordinary conduct of the
business of Company or any of its
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Subsidiaries or resulting in a material diminution in the value of any
Collateral as security for the Secured Obligations;
(vi) easements, rights-of-way, restrictions, encroachments,
and other minor defects or irregularities in title to the real property
of Company and its Subsidiaries, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the
business of Company or any of its Subsidiaries or result in a material
diminution in the value of any Collateral as security for the Secured
Obligations;
(vii) any (a) interest or title of a lessor or sublessor under
any lease not prohibited by this Agreement, (b) restriction or
encumbrance that the interest or title of such lessor or sublessor may
be subject to, or (c) subordination of the interest of the lessee or
sublessee under such lease to any restriction or encumbrance referred
to in the preceding clause (b), so long as the holder of such
restriction or encumbrance agrees to recognize the rights of such
lessee or sublessee under such lease;
(viii) Liens arising from filing UCC financing statements
relating solely to leases not prohibited by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(x) any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the use of
any real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the ordinary
course of business of Company and its Subsidiaries; and
(xii) licenses of Intellectual Property granted by Company or
any of its Subsidiaries in the ordinary course of business and not
interfering in any material respect with the ordinary conduct of the
business of Company or such Subsidiary.
Other Liens on assets of Borrowers and their Subsidiaries
permitted under this Agreement (which are not Permitted Encumbrances) are
described in subsection 7.2A.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"PETITION DATE" has the meaning assigned to that term in the
recitals to this Agreement.
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"PLAN OF REORGANIZATION" means the Debtors' Second Joint Plan
of Reorganization under Chapter 11 of the Bankruptcy Code as filed with the
Bankruptcy Court on January 14, 2004 (and as revised and amended through March
2, 2004), together with the Reorganization Plan Supplement to Debtors' Second
Joint Plan of Reorganization filed with the Bankruptcy Court on February 18,
2004 in connection therewith.
"PLEDGED COLLATERAL" means the "Pledged Collateral" as defined
in the Security Agreement.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"PREPETITION CREDIT AGREEMENT" means the Revolving Credit and
Participation Agreement dated as of March 14, 2001, among Company, certain of
its Subsidiaries, the financial institutions listed on the signature pages
thereof, Deutsche Bank, as Documentation Agent, and Bank of America, as
Administrative Agent, as amended, restated, supplemented or otherwise modified
through the Closing Date and as it may hereafter be amended, restated,
supplemented or otherwise modified.
"PREPETITION CREDIT DOCUMENTS" means all "Loan Documents" as
defined in the Prepetition Credit Agreement.
"PREPETITION LENDERS" means the Persons identified as
"Lenders" under the Prepetition Credit Agreement, in their capacities as lenders
under the Prepetition Credit Agreement, together with their successors and
permitted assigns.
"PREPETITION OBLIGATIONS" means all "Obligations" as defined
in the Prepetition Credit Agreement.
"PREPETITION SECURED CLAIMS" means, collectively, the "Secured
Bank Claims" and the "9.25% Debenture Claims", as such terms are defined in the
Plan of Reorganization.
"PREPETITION UNSECURED CLAIMS" means "Parent and Holding
Company Unsecured Claims" that are "Allowed," as such terms are defined in the
Plan of Reorganization.
"PRIME RATE" means the rate per annum equal to the prime rate
of interest announced from time to time by Bank One or its parent (which is not
necessarily the lowest rate charged to any customer), changing when and as said
prime rate changes. Bank One or any other Lender may make commercial loans or
other loans at rates of interest at, above or below the Prime Rate.
"PROCEEDINGS" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration.
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"PROJECT" means any waste-to-energy facility, electrical
generation plant, cogeneration plant, water treatment facility or other facility
for the generation of electricity or engaged in another line of business in
which Company and its Subsidiaries are permitted to be engaged hereunder for
which a Subsidiary or Subsidiaries of Company (including CPIH Subsidiaries) was,
is or will be (as the case may be) an owner, operator, manager or builder, and
shall also mean any two or more of such plants or facilities in which an
interest has been acquired in a single transaction, so long as such interest
constitutes an existing Investment on the Closing Date permitted under this
Agreement; provided, however, that a Project shall cease to be a Project of
Company and its Subsidiaries at such time that Company or any of its
Subsidiaries ceases to have any existing or future rights or obligations
(whether direct or indirect, contingent or matured) associated therewith.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Revolving Loan Commitment or the
Revolving Loans of any Lender, the percentage obtained by dividing (x) the
Revolving Loan Exposure of that Lender by (y) the aggregate Revolving Loan
Exposure of all Lenders, in any such case as the applicable percentage may be
adjusted by assignments permitted pursuant to subsection 10.1; (ii) with respect
to all payments, computations and other matters relating to the Letter of Credit
Commitment of any Lender or any Letters of Credit issued or participations
therein deemed purchased by any Lender, the percentage obtained by dividing (a)
the Letter of Credit Exposure of that Lender by (b) the aggregate Letter of
Credit Exposure of all Lenders, in any such case as the applicable percentage
may be adjusted by assignments permitted pursuant to subsection 10.1 and (iii)
with respect to all payments, computations and other matters relating to the
Commitments of Lenders generally, the percentage obtained by dividing (x) the
aggregate Credit Exposure of that Lender by (y) the aggregate Credit Exposure of
all Lenders, in any such case as the applicable percentage may be adjusted by
assignments permitted pursuant to subsection 10.1. The initial Pro Rata Share of
each Lender is set forth opposite the name of that Lender in Schedule 2.1
annexed hereto.
"PTO" means the United States Patent and Trademark Office or
any successor or substitute office in which filings are necessary or, in the
opinion of Administrative Agent, desirable in order to create or perfect Liens
on any IP Collateral.
"PURPA" means the Public Utility Regulatory Policies Act of
1978, as amended.
"RCRA" means the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Section 6901 et seq.), or any successor statute, and all
implementing regulations promulgated thereunder.
"REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by any Borrower in any real property.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been recorded in
all places necessary or desirable, in Administrative Agent's reasonable
judgment, to give constructive notice of
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such Leasehold Property to third-party purchasers and encumbrancers of the
affected real property. For purposes of this definition, the term "RECORD
DOCUMENT" means, with respect to any Leasehold Property, (a) the lease
evidencing such Leasehold Property or a memorandum thereof, executed and
acknowledged by the owner of the affected real property, as lessor, or (b) if
such Leasehold Property was acquired or subleased from the holder of a Recorded
Leasehold Interest, the applicable assignment or sublease document, executed and
acknowledged by such holder, in each case in form sufficient to give such
constructive notice upon recordation and otherwise in form reasonably
satisfactory to Administrative Agent.
"REGISTER" has the meaning assigned to that term in subsection
2.1E.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED AGREEMENTS" means the Detroit L/C Facility Documents,
the High Yield Indenture, the High Yield Notes, the Corporate Services
Reimbursement Agreement, the Management Services and Reimbursement Agreement and
the DHC Tax Sharing Agreement as such agreements and instruments may be amended,
restated, supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12.
"RELEASE" means any releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, disposing, depositing or migrating of Hazardous Materials into the
indoor or outdoor environment (including the abandonment, discarding or disposal
of any barrels, containers or other closed receptacles containing any Hazardous
Materials), including the movement of any Hazardous Materials through the air,
soil, surface water or groundwater.
"REPLACEMENT CLOSING DATE LETTER OF CREDIT" means a Closing
Date Letter of Credit issued to replace a DIP Tranche A L/C or a DIP Tranche B
L/C and any Letter of Credit issued to replace or extend the same pursuant to
subsection 3.1B(ii)(a).
"REQUEST FOR ISSUANCE" means a request substantially in the
form of Exhibit III annexed hereto.
"REQUISITE DIP LENDERS" means DIP Lenders having or holding
more than 50% of the aggregate credit exposure under the DIP Tranche A L/Cs and
the DIP Tranche B L/Cs.
"REQUISITE LENDERS" means Lenders having or holding more than
50% of the aggregate Credit Exposure of all Lenders.
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"RESERVE REQUIREMENT" means, with respect to an Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under Regulation D
on eurocurrency liabilities.
"RESTRICTED ACCOUNT" means any account that is either (i) a
collateral account, debt service reserve account or other Deposit Account to
which the access of Company and its Subsidiaries is restricted pursuant to a
valid and enforceable Contractual Obligation, so long as such account is (a)
related to a Project of Company and its Subsidiaries, (b) is required to be
opened or maintained by Company or any of its Subsidiaries pursuant to a
Contractual Obligation binding on such Person and (c) is permitted to be
maintained under this Agreement, or (ii) a reserve account established in
accordance with the Approved Plan of Reorganization.
"RESTRICTED PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Indebtedness
of Company and its Subsidiaries other than (a) the Obligations, (b) Indebtedness
owed by a Subsidiary to a Borrower, (c) Indebtedness under the Detroit L/C
Facility Documents or the High Yield Notes, and (d) other amounts required to be
paid under this Agreement.
"REVOLVING LENDER" means any Lender having or holding
Revolving Loan Exposure.
"REVOLVING LOAN COMMITMENT" and "REVOLVING LOAN COMMITMENTS"
have the respective meanings assigned to such terms in subsection 2.1(A).
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as
of any date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment, and (ii) after the
termination of the Revolving Loan Commitments, the aggregate outstanding
principal amount of the Revolving Loans of that Lender.
"REVOLVING LOANS" means the loans made (or deemed made) by
Revolving Lenders to Borrowers pursuant to subsection 2.1A.
"REVOLVING NOTES" means any promissory notes of Borrowers
issued pursuant to subsection 2.1F to evidence the Revolving Loans of any
Lenders, substantially in the form
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of Exhibit II annexed hereto, as they may be amended, restated, supplemented or
otherwise modified from time to time.
"SECURED OBLIGATIONS" means the obligations secured by the
Collateral pursuant to the Collateral Documents.
"SECURED PARTIES" means the "Secured Parties" as defined in
the Intercreditor Agreement.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated, certificated or uncertificated, or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SECURITIES ACCOUNT" means an account to which a financial
asset is or may be credited in accordance with an agreement under which the
Person maintaining the account undertakes to treat the Person for whom the
account is maintained as entitled to exercise the rights that comprise the
financial asset.
"SECURITY AGREEMENT" means the Security Agreement executed and
delivered on the Closing Date by Credit Parties (except as otherwise
contemplated in Section 5.18) other than DHC, substantially in the form of
Exhibit VII annexed hereto, as such Security Agreement may thereafter be
amended, restated, supplemented or otherwise modified from time to time.
"SEIU PENSION PLAN" means the Pension Plan referred to
generally by Company on and prior to the Closing Date as the "Service Employees
International Union Pension Trust for Employees of Allied Plant Maintenance
Company, Inc. Defined Benefit Pension Plan".
"SETTLEMENT" has the meaning assigned to that term in
subsection 2.1D.
"SETTLEMENT DATE" has the meaning assigned to that term in
subsection 2.1D.
"SOLVENT" means, with respect to any Person, that as of the
date of determination, in light of all of the facts and circumstances existing
at such time, (i) the then fair saleable value of the property of such Person is
(a) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (b) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and due considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in
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relation to its business or any contemplated or undertaken transaction; and
(iii) such Person does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts beyond its ability to pay such debts as they
become due. For purposes of this definition, the amount of any contingent
liability at any time shall be computed as the amount that, in light of all of
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
"SUBORDINATED INDEBTEDNESS" means, collectively, (i)
Indebtedness under the Unsecured Creditor Notes and the Unsecured Creditor Notes
Indenture, and (ii) any other Indebtedness of Company or any of its Subsidiaries
incurred from time to time and subordinated by its terms in right of payment to
the Obligations.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, trust, limited liability company, association, joint
venture or other business entity of which more than 50% of the total voting
power of shares of stock or other ownership interests entitled (without regard
to the occurrence of any contingency) to vote in the election of the members of
the Governing Body is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof. Any reference contained herein to one or more Subsidiaries
of Company or of Company's Domestic Subsidiaries shall, unless otherwise
expressly indicated, not include any CPIH Subsidiaries and Greenway Insurance
Company of Vermont.
"SWEEP DATE" has the meaning assigned to that term in
subsection 2.4A(iii)(f).
"SWINGLINE LOAN" has the meaning assigned to that term in
subsection 2.1D.
"SYNTHETIC LEASE OBLIGATION" means the monetary obligation of
a Person under (i) a so-called synthetic, off-balance sheet or tax retention
lease, or (ii) an agreement for the use or possession of property creating
obligations that do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).
"TAMPA SUBSIDIARIES" means Covanta Tampa Construction,
Inc., a Delaware corporation, and Covanta Tampa Bay, Inc., a Florida
corporation.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed, including interest, penalties, additions to tax and any
similar liabilities with respect thereto; except that, in the case of a Lender,
there shall be excluded franchise taxes and all taxes that are imposed on the
overall income or profits of such Lender by the United States or by any other
Government Authority under the laws of which Lender is organized or has its
principal office or maintains its applicable lending office.
"TAX NOTE" has the meaning assigned to that term in subsection
4.1F(iv).
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"TOTAL DEBT" means, as at any date of determination, (i) the
aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP, minus
(ii) the amounts of "Current portion of project debt" and "Project Debt",
whether such line items are so titled or otherwise titled, as such line items
are or would be reflected in Company's consolidated balance sheet as at such
date prepared in conformity with GAAP and reported in a manner consistent with
Company's reporting of such amounts in its quarterly or annual report (as the
case may be) on Form 10Q or 10K, respectively, prior to the Closing Date, minus
(iii) any portion of Indebtedness of Company and its Subsidiaries under the CPIH
Stock Pledge Agreement or the Corporate Services Reimbursement Agreement
included in the amount described in clause (i) above, minus (iv) any portion of
the amount described in clause (i) above that represents a funded drawing under
a letter of credit (otherwise permitted to be outstanding under this Agreement)
supporting obligations of Company and its Subsidiaries (including CPIH
Subsidiaries) in respect of the Quezon Project.
"TREASURY REGULATIONS" means the Treasury Regulations
promulgated under the Internal Revenue Code.
"TSCA" means the Toxic Substances Control Act of 1976, as
amended (15 U.S.C. Section 2601 et seq.), or any successor statute, and all
implementing regulations promulgated thereunder.
"UBS BANK" means UBS AG, Stamford Branch.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"UNITED STATES" means the United States of America.
"UNSECURED CREDITOR NOTES" has the meaning assigned to that
term in subsection 4.1F(iv).
"UNSECURED CREDITOR NOTES INDENTURE" means the Indenture
pursuant to which the Unsecured Creditor Notes are issued.
"WARREN SUBSIDIARIES" means Covanta Warren Energy Resource Co.
LP, a Delaware limited partnership, Covanta Warren Holdings I, Inc., a Virginia
corporation, and Covanta Warren Holdings II, Inc., a California corporation.
1.2. ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF
CALCULATIONS UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (iii) and
(iv) of subsection 6.1 shall be prepared in accordance with GAAP as in effect at
the time of such preparation (and delivered together
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with the reconciliation statements provided for in subsection 6.1(vi)). Except
as otherwise permitted by this Agreement, calculations in connection with the
definitions, covenants and other provisions of this Agreement shall utilize GAAP
as in effect on the date of determination, applied in a manner consistent with
that used in preparing the financial statements referred to in subsection 5.3.
If at any time any change in GAAP would affect the computation of any financial
ratio or requirement set forth in any Credit Document, and Company,
Administrative Agent or Requisite Lenders shall so request, Administrative
Agent, Lenders and Company shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of Requisite Lenders), provided, that until so
amended, such ratio or requirement shall continue to be computed in accordance
with GAAP prior to such change therein and Company shall provide to
Administrative Agent and Lenders reconciliation statements provided for in
subsection 6.1(vi).
1.3. OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
B. References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided.
C. The use in any of the Credit Documents of the word
"include" or "including", when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
SECTION 2. REVOLVING LOANS; INTEREST RATES; FEES; AND CERTAIN TERMS OF
PAYMENT AND REPAYMENT AND OTHER MATTERS
2.1. REVOLVING LOAN COMMITMENTS; MAKING OF REVOLVING LOANS; THE
REGISTER; OPTIONAL NOTES.
A. REVOLVING LOAN COMMITMENTS. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of Borrowers herein set forth, each Lender severally, and not jointly
and severally, agrees to make a portion of its Letter of Credit Commitment
available as Revolving Loans to be made to Borrowers from time to time during
the period from the Closing Date to but excluding the Maturity Date in an
aggregate amount not exceeding such Lender's Pro Rata Share of the aggregate
amount of the Revolving Loan Commitments (as hereinafter defined) to be used for
the purposes identified in subsection 2.5A. The original amount of the portion
of each Lender's Letter of Credit Commitment that is available for the making of
Revolving Loans to Borrowers (such Lender's "REVOLVING LOAN COMMITMENT") is set
forth opposite its name on
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Schedule 2.1 annexed hereto and the aggregate original amount of such portions
of the Letter of Credit Commitments that are available for the making of
Revolving Loans to Borrowers is $10,000,000 (the "REVOLVING LOAN COMMITMENTS");
provided, however, that the Revolving Loan Commitments of Lenders shall be
adjusted to give effect to any assignments of the Revolving Loan Commitments
pursuant to subsection 10.1B and shall be reduced from time to time by the
amount of any reductions thereto made pursuant to subsection 2.4. Each Lender's
Revolving Loan Commitment shall expire on the day before the Maturity Date and
all Revolving Loans and all other amounts owed hereunder with respect to the
Revolving Loans and the Revolving Loan Commitments shall be paid in full no
later than the Maturity Date. Amounts borrowed under this subsection 2.1A may be
repaid and reborrowed up to but excluding the Maturity Date. Anything contained
in this Agreement to the contrary notwithstanding, in no event shall any
Revolving Loan be requested or made if, after giving effect thereto, (i) the
aggregate principal amount of all Revolving Loans outstanding would exceed the
aggregate Revolving Loan Commitments then in effect or (ii) the aggregate Credit
Utilization then in effect would exceed the aggregate Letter of Credit
Commitments then in effect.
B. BORROWING MECHANICS. Revolving Loans made on any Funding
Date shall be in an aggregate minimum amount of $200,000 and integral multiples
of $100,000 in excess of that amount (or, if the amount of the Revolving Loan
Commitments unfunded and available for borrowing is less than such aggregate
minimum amount, an amount equal to the amount of the Revolving Loan Commitments
unfunded and available for borrowing); provided that Revolving Loans made on any
Funding Date as Eurodollar Rate Loans with a particular Interest Period shall be
in an aggregate minimum amount of $500,000 and integral multiples of $200,000 in
excess of that amount. Whenever Borrowers desire that Lenders make Revolving
Loans they shall deliver to Administrative Agent a Notice of Borrowing no later
than 10:00 A.M. (Chicago time) at least three Business Days in advance of the
proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least one
Business Day in advance of the proposed Funding Date (in the case of a Base Rate
Loan). Revolving Loans may be continued as or converted into Base Rate Loans and
Eurodollar Rate Loans in the manner provided in subsection 2.2D. In lieu of
delivering a Notice of Borrowing, Borrowers may give Administrative Agent
telephonic notice by the required time of any proposed borrowing under this
subsection 2.1B; provided that such notice shall be promptly confirmed in
writing by delivery of a duly executed Notice of Borrowing to Administrative
Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any
liability to any Borrower in acting upon any telephonic notice referred to above
that Administrative Agent believes in good faith to have been given by an
Officer of a Borrower or for otherwise acting in good faith under this
subsection 2.1B or under subsection 2.2D, and upon funding of Revolving Loans by
Lenders, and upon conversion or continuation of the applicable basis for
determining the interest rate with respect to any Revolving Loans pursuant to
subsection 2.2D, in each case in accordance with this Agreement, pursuant to any
such telephonic notice Borrowers shall have effected Revolving Loans or a
conversion or continuation thereof, as the case may be.
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Borrowers shall notify Administrative Agent prior to the
funding of any Revolving Loans in the event that any of the matters to which
Borrowers are required to certify in the applicable Notice of Borrowing is no
longer true and correct as of the applicable Funding Date, and the acceptance by
Borrowers of the proceeds of any Revolving Loans shall constitute a
re-certification by Borrowers, as of the applicable Funding Date, as to the
matters to which Borrowers are required to certify in the applicable Notice of
Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Borrowing for, or a Notice of Conversion/Continuation for
conversion to, or continuation of, a Eurodollar Rate Loan (or telephonic notice
in lieu thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Borrowers shall be bound to make a borrowing or to
effect a conversion or continuation in accordance therewith.
Notwithstanding the foregoing provisions of this subsection
2.1B, no Eurodollar Rate Loans may be made and no Base Rate Loan may be
converted into a Eurodollar Rate Loan until the third Business Day after the
Closing Date.
C. DISBURSEMENT OF FUNDS. All Revolving Loans under this
Agreement shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that neither Administrative
Agent nor any Lender shall be responsible for any default by any other Lender in
that other Lender's obligation to make a Revolving Loan requested hereunder nor
shall the Commitment of any Lender to make a Revolving Loan requested be
increased or decreased as a result of a default by any other Lender in that
other Lender's obligation to make a Revolving Loan requested hereunder. Promptly
after receipt by Administrative Agent of a Notice of Borrowing pursuant to
subsection 2.1B (or telephonic notice in lieu thereof) or a notice deemed to be
a Notice of Borrowing pursuant to subsection 2.1B, Administrative Agent shall
notify each Lender of the proposed borrowing. Each such Lender shall make the
amount of its Revolving Loan available to Administrative Agent not later than
12:00 Noon (Chicago time) on the applicable Funding Date, in same day funds in
Dollars, at the Funding and Payment Office. Upon satisfaction or waiver of the
conditions precedent specified in subsections 4.1 (in the case of Revolving
Loans made on the Closing Date) and 4.2 (in the case of all Revolving Loans),
Administrative Agent shall make the proceeds of such Revolving Loans available
to Borrowers on the applicable Funding Date by causing an amount of same day
funds in Dollars equal to the proceeds of all such Revolving Loans received by
Administrative Agent from Lenders to be credited to the account of Borrowers at
the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any
Lender prior to a Funding Date that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Revolving Loan
requested on such Funding Date, Administrative Agent may assume that such Lender
has made such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Borrowers a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
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corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Borrowers and Borrowers shall immediately pay such corresponding amount
to Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Borrowers may
have against any Lender as a result of any default by such Lender hereunder.
D. SWINGLINE LOANS. Subject to each of the terms and
conditions set forth herein, Administrative Agent shall make each Revolving
Loan, on behalf of Revolving Lenders and in the amount requested, available to
Borrowers on the applicable Funding Date in the manner set forth in subsection
2.1C. Each Revolving Loan made solely by Administrative Agent pursuant to this
subsection 2.1D is referred to in this Agreement as a "SWINGLINE LOAN" and such
Revolving Loans are referred to in this Agreement collectively as "SWINGLINE
LOANS". Each Swingline Loan shall be subject to all of the terms and conditions
applicable to other Revolving Loans funded by Revolving Lenders (including,
without limitation, the conditions set forth in Section 4), except that all
payments thereon shall be payable to Administrative Agent solely for its own
account (other than as expressly set forth in the Inter-Lender Agreement). All
Swingline Loans shall be secured by the Liens under the Collateral Documents and
shall constitute Revolving Loans for all purposes hereunder and under each other
Credit Document. At any time upon the occurrence and during the continuance of
an Event of Default, Administrative Agent may request settlement of any
Swingline Loans (a "SETTLEMENT") with the Revolving Lenders by notifying the
Revolving Lenders of such requested Settlement by telecopy or telephone no later
than 12:00 Noon (Chicago time) on the date of such requested Settlement (the
"SETTLEMENT DATE"). Each Revolving Lender (excluding Administrative Agent in all
events) agrees to transfer in immediately available funds the entire amount of
such Revolving Lender's Pro Rata Share of the outstanding principal balance of
the Swingline Loan with respect to which a Settlement has been requested to
Administrative Agent, at such account of Administrative Agent as Administrative
Agent may designate, no later than 2:00 p.m. (Chicago time) on the Settlement
Date. The foregoing obligations of the Revolving Lenders in respect of
Settlements shall be unconditional (it being understood for the avoidance of
doubt that Settlements may occur during the existence of an Event of Default or
Potential Event of Default and regardless of whether the applicable conditions
set forth in Section 4 have been satisfied). Such amounts that are transferred
by the Revolving Lenders to Administrative Agent shall be applied against the
outstanding principal balance of the applicable Swingline Loan and shall
constitute Revolving Loans of such Revolving Lenders, respectively. If any such
amount in respect of a Swingline Loan is not transferred to Administrative Agent
by any Revolving
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Lender on the Settlement Date applicable thereto, then Administrative Agent
shall be unconditionally entitled to recover such amount on demand from such
Revolving Lender together with interest thereon at the rate applicable to such
Swingline Loan hereunder.
E. THE REGISTER. Administrative Agent, acting for these
purposes solely as an agent of Borrowers (it being acknowledged that
Administrative Agent, in such capacity, and its officers, directors, employees,
agent and affiliates shall constitute Indemnitees under subsection 10.3), shall
maintain (and make available for inspection by Borrowers and Lenders upon
reasonable prior notice at reasonable times) at its address referred to in
subsection 10.8 a register for the recordation of, and shall record, the names
and addresses of Lenders and the Revolving Loan Commitment, Letter of Credit
Commitment, Revolving Loans and participations in Letters of Credit of each
Lender from time to time (the "REGISTER"). Borrowers, Administrative Agent and
Lenders shall deem and treat the Persons listed as Lenders in the Register as
the holders and owners of the corresponding Commitments, Revolving Loans and
participations listed therein for all purposes hereof; all amounts owed with
respect to any Commitment, Revolving Loan or participation shall be owed to the
Lender listed in the Register as the owner thereof; and any request, authority
or consent of any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be conclusive
and binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Revolving Loans. Each Lender shall record on its
internal records the amount of its participation, Revolving Loans and
Commitments and each payment in respect hereof, and any such recordation shall
be conclusive and binding on Borrowers, absent manifest error, subject to the
entries in the Register, which shall, absent manifest error, govern in the event
of any inconsistency with any Lender's records. Failure to make any recordation
in the Register or in any Lender's records, or any error in such recordation,
shall not affect any participations, Revolving Loans or Commitments or any
Obligations in respect of any Revolving Loans or participations.
F. OPTIONAL NOTES. If so requested by any Lender by written
notice to Company (with a copy to Administrative Agent) at least two Business
Days prior to the Closing Date or at any time thereafter, Borrowers shall
execute and deliver to such Lender (and/or, if applicable and if so specified in
such notice, to any Person who is an assignee of such Lender pursuant to
subsection 10.1) on the Closing Date (or, if such notice is delivered after the
date which is two Business Days prior to the Closing Date, promptly after
Company's receipt of such notice) a promissory note or promissory notes to
evidence such Lender's Revolving Loans, substantially in the form of Exhibit II
annexed hereto, with appropriate insertions, including the principal amount of
that Lender's Revolving Loan Commitment.
2.2. INTEREST ON THE REVOLVING LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections
2.6 and 2.7, each Revolving Loan shall bear interest on the unpaid principal
amount thereof from the date made until repayment in full at a rate determined
by reference to the Base Rate or the Eurodollar Rate. The applicable basis for
determining the rate of interest with respect to any Revolving Loan shall be
selected by Borrowers initially at the time a Notice of Borrowing is
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given with respect to such Revolving Loan pursuant to subsection 2.2B (subject
to the last sentence of subsection 2.1B), and the basis for determining the
interest rate with respect to any Revolving Loan may be changed from time to
time pursuant to subsection 2.2B (subject to the last sentence of subsection
2.1B); provided, that if an Event of Default or Potential Event of Default then
exists, Borrowers shall not be entitled to request that any Revolving Loan be
made as a Eurodollar Rate Loan. If on any day a Revolving Loan is outstanding
with respect to which notice has not been delivered to Administrative Agent in
accordance with the terms of this Agreement specifying the applicable basis for
determining the rate of interest, then for that day that Revolving Loan shall
bear interest determined by reference to the Base Rate. Subject to the
provisions of subsections 2.2E, 2.2G and 2.7, the Revolving Loans shall bear
interest through maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate
plus the Base Rate Margin; or
(ii) if a Eurodollar Rate Loan, then at the sum of the
Eurodollar Rate plus the Eurodollar Rate Margin.
B. INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, Borrowers shall, pursuant to the applicable Notice of Borrowing or Notice
of Conversion/Continuation, as the case may be, select an the interest period
(each, an "INTEREST PERIOD") to be applicable to such Revolving Loan, which
Interest Period shall be a one-, two- or three-month period; provided that:
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Revolving Loan,
in the case of a Revolving Loan initially made as a Eurodollar Rate
Loan, or on the date specified in the applicable Notice of
Conversion/Continuation, in the case of a Revolving Loan converted to a
Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a
Notice of Conversion/Continuation, each successive Interest Period
shall commence on the day on which the next preceding Interest Period
expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
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(v) no Interest Period with respect to any portion of the
Revolving Loans shall extend beyond the Maturity Date in effect at the
commencement of such Interest Period; and
(vi) there shall be no more than four Interest Periods
outstanding at any time.
C. INTEREST PAYMENTS. Subject to the provisions of subsection
2.2E, interest on each Revolving Loan shall be payable in arrears on and to each
Interest Payment Date applicable to that Revolving Loan, upon any prepayment of
that Revolving Loan (to the extent accrued on the amount being prepaid) and at
maturity (including final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Borrowers shall have the option (i) to convert at any time all
or any part of their outstanding Revolving Loans equal to $200,000 and integral
multiples of $100,000 in excess of that amount from Revolving Loans bearing
interest at a rate determined by reference to one basis to Revolving Loans
bearing interest at a rate determined by reference to an alternative basis or
(ii) upon the expiration of any Interest Period applicable to a Eurodollar Rate
Loan, to continue all or any portion of such Revolving Loan equal to $500,000
and integral multiples of $200,000 in excess of that amount as a Eurodollar Rate
Loan; provided, however, that (a) no Base Rate Loan may be converted into a
Eurodollar Rate Loan and no Eurodollar Rate Loan may be continued as a
Eurodollar Rate Loan if an Event of Default or Potential Event of Default then
exists and (b) a Eurodollar Rate Loan may only be converted into a Base Rate
Loan on the expiration date of an Interest Period applicable thereto.
Borrowers shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (Chicago time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). In lieu of delivering a Notice of
Conversion/Continuation Borrowers may give Administrative Agent telephonic
notice by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Administrative
Agent shall promptly notify each Lender of any Revolving Loan subject to the
Notice of Conversion/Continuation.
E. DEFAULT RATE. Upon the occurrence and during the
continuation of any Event of Default and notice to Borrowers from Administrative
Agent, the outstanding principal amount of all Revolving Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder (but not
including amounts drawn under any Letter of Credit that are not reimbursed by
Borrowers when required under subsection 3.3), shall thereafter bear interest
(including post petition interest in any proceeding under the Bankruptcy Code or
other applicable bankruptcy laws) payable upon demand at a rate that is (i) in
the case of any
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Revolving Loans, 2.00% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to such Revolving Loans or (ii) in the
case of fees and other amounts, 2.00% per annum in excess of the interest rate
otherwise payable under this Agreement for Base Rate Loans. Payment or
acceptance of the increased rates of interest provided for in this subsection
2.2E is not a permitted alternative to timely payment and shall not constitute a
waiver of any Event of Default or otherwise prejudice or limit any rights or
remedies of Administrative Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Revolving Loans
and other amounts bearing interest with reference to the Base Rate shall be
computed on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on any
Revolving Loan or amount funded in a drawing under a Letter of Credit, the date
of the making of such Revolving Loan or the date of funding of such drawing or
the first day of an Interest Period applicable to such Revolving Loan or, with
respect to a Base Rate Loan being converted from a Eurodollar Rate Loan, the
date of conversion of such Eurodollar Rate Loan to such Base Rate Loan, as the
case may be, shall be included; and the date of payment of such Revolving Loan
or funded drawing or the expiration date of an Interest Period applicable to
such Revolving Loan or, with respect to a Base Rate Loan being converted to a
Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such
Eurodollar Rate Loan, as the case may be, shall be excluded; provided that if a
Revolving Loan or funded drawing is repaid on the same day on which it is made,
one day's interest shall be paid on that Revolving Loan or funded drawing.
G. MAXIMUM RATE. Notwithstanding the foregoing provisions of
this subsection 2.2, in no event shall the rate of interest payable by Borrowers
with respect to any Revolving Loan or funded drawing under any Letter of Credit
exceed the maximum rate of interest permitted to be charged under applicable
law.
2.3. FEES.
A. AGENCY FEE. Borrowers, jointly and severally, agree to pay
to Administrative Agent on the Closing Date and each anniversary of the Closing
Date (excluding the Maturity Date), for Administrative Agent's own account and
in advance for the forthcoming year, an annual agency fee in an amount equal to
$30,000. Each such annual maintenance fee shall be fully-earned and
non-refundable when due.
B. COMMITMENT FEE. Borrowers, jointly and severally, agree to
pay to Administrative Agent, for distribution to Issuing Lender and Lenders
(with the allocation among Issuing Lender and Lenders to be as set forth in the
Inter-Lender Agreement and the allocation among Lenders to be in proportion to
their respective Pro Rata Shares), commitment fees for the period from and
including the Closing Date to but excluding the Maturity Date equal to (i) the
daily excess of the aggregate Letter of Credit Commitments over the aggregate
Credit Utilization, multiplied by (ii) the Commitment Fee Percentage, expressed
as a daily rate. Such commitment fees shall be payable in arrears on and to (but
excluding) the last day of each fiscal quarter and on the Maturity Date and
computed on the basis of a 360-day year, for the actual number of days elapsed.
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C. CLOSING FEE. Borrowers, jointly and severally, agree to pay
on the Closing Date to Lenders, in proportion to their respective Pro Rata
Shares, a closing fee in an aggregate amount that is equal to two percent
(2.00%) of the total amount of the Letter of Credit Commitments of Lenders
hereunder as of the Closing Date.
D. OTHER FEES. Borrowers, jointly and severally, agree to pay
to Administrative Agent such fees in the amounts and at the times separately
agreed upon between Company and Administrative Agent. All fees referenced in
this subsection 2.3 shall be earned when payable and shall be non-refundable.
2.4. MANDATORY PAYMENTS, REDUCTIONS IN COMMITMENTS; GENERAL
PROVISIONS REGARDING PAYMENTS; APPLICATION OF PROCEEDS OF
COLLATERAL.
A. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS.
(i) Voluntary Prepayments. Borrowers may, upon not less than
one Business Day's prior written or telephonic notice, in the case of
Base Rate Loans, and three Business Days' prior written or telephonic
notice, in the case of Eurodollar Rate Loans, in each case given to
Administrative Agent by 12:00 Noon (Chicago time) on the date required
and, if given by telephone, promptly confirmed in writing to
Administrative Agent, who will promptly notify each Lender whose
Revolving Loans are to be prepaid of such prepayment, at any time and
from time to time prepay any Revolving Loans on any Business Day in
whole or in part in an aggregate minimum amount of $1,000,000 and
integral multiples of $1,000,000 in excess of that amount (or, if the
amount of the Revolving Loans is less than such aggregate minimum
amount, an amount equal to the amount of the Revolving Loans); provided
that voluntary prepayments of Eurodollar Rate Loans made on a date
other than an Interest Payment Date applicable to such Eurodollar Rate
Loan shall be subject to breakage fees, costs and expenses, if any, in
accordance with subsection 2.6D. Notice of prepayment having been given
as aforesaid, the principal amount of the Revolving Loans specified in
such notice shall become due and payable on the prepayment date
specified therein. Any such voluntary prepayment shall be applied as
specified in subsection 2.4A(iv).
(ii) Voluntary Reductions of Commitments. Borrowers may, upon
not less than one Business Day's prior written or telephonic notice
confirmed in writing to Administrative Agent, at any time and from time
to time, terminate in whole or permanently reduce in part, without
premium or penalty, (a) the Revolving Loan Commitments in an amount up
to the amount by which the Revolving Loan Commitments exceed the
aggregate Revolving Loans outstanding at the time of such proposed
termination or reduction or (b) the Letter of Credit Commitments in an
amount up to the amount by which the Letter of Credit Commitments
exceed the Letter of Credit Usage at the time of such proposed
termination or reduction; provided that any such partial reduction of
either the Revolving Loan Commitments or the Letter of Credit
Commitments shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $1,000,000 in excess of that amount. Borrowers'
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notice to Administrative Agent (who shall promptly notify each
Revolving Lender or Letter of Credit Lender, as applicable, of such
notice) shall designate the date (which shall be a Business Day) of
such termination or reduction and the amount of any partial reduction,
and such termination or reduction of any of the Commitments shall be
effective on the date specified in Company's notice and shall reduce
the particular type of Commitment of each Lender proportionately to its
Pro Rata Share. No such voluntary reduction of the Commitments shall be
permitted if such reduction would result in (1) the Revolving Loan
Commitments being less than the aggregate principal amount of all
outstanding Revolving Loans, or (2) the aggregate Letter of Credit
Commitments being less than the aggregate Letter of Credit Usage then
in effect.
(iii) Mandatory Payments. Mandatory Payments shall be made in
the amounts and under the circumstances set forth below, all such
Mandatory Payments to be applied to repay the Obligations and/or
permanently reduce the Commitments as set forth below or as more
specifically provided in subsection 2.4A(iv), except to the extent that
the Intercreditor Agreement requires application thereof in a different
manner than as set forth in this subsection 2.4A(iii) or subsection
2.4A(iv) (it being understood that if a payment is made in accordance
with the terms of the Intercreditor Agreement, a duplicate payment
shall not be required hereunder and the application required under the
terms of the Intercreditor Agreement shall apply as if set forth
herein):
(a) Net Asset Sale Proceeds. No later than 2 days
after the date of receipt by Company or any of its
Subsidiaries of any Net Asset Sale Proceeds in respect of any
Asset Sale, Company shall make a Mandatory Payment in an
aggregate amount equal to (1) to the extent that aggregate Net
Asset Sale Proceeds in respect of all Asset Sales made on or
prior to such date is $7,500,000 or less, 33.33% of such Net
Asset Sale Proceeds, or (2) to the extent that aggregate Net
Asset Sale Proceeds in respect of all Asset Sales made on or
prior to such date exceeds $7,500,000, 100% of such excess
(without duplication).
(b) Net Insurance/Condemnation Proceeds. No later
than the fifth Business Day following the date of receipt by
Administrative Agent or by Company or any of its Subsidiaries
of any Net Insurance/Condemnation Proceeds that are required
to be used for a Mandatory Payment pursuant to the provisions
of subsection 6.4C, Company shall make a Mandatory Payment in
an aggregate amount equal to the amount of such Net
Insurance/Condemnation Proceeds.
(c) Issuance of Indebtedness. On the date of receipt
of the Net Indebtedness Proceeds from the issuance of any
Indebtedness of Company or any of its Subsidiaries after the
Closing Date, other than Indebtedness permitted pursuant to
subsections 7.1(i) through (xvi), Company shall make a
Mandatory Payment in an aggregate amount equal to such Net
Indebtedness Proceeds.
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(d) Tax Refunds. If after the Closing Date, Company
or any of its Subsidiaries receives any payment of a cash
refund or rebate of any Tax, the Borrowers shall no later than
the Business Day following the date of receipt of such refund
or rebate make a Mandatory Payment in the amount of such Tax
refund or rebate, except to the extent such application would
constitute a material violation of a valid Contractual
Obligation in connection with a Project of Company or any of
its Subsidiaries to remit such refund or rebate to the client
of such Project.
(e) Annual Free Cash Flow. In the event that there
shall be Annual Free Cash Flow for any Fiscal Year (commencing
with Fiscal Year 2004), Company shall, no later than 60 days
after the end of such Fiscal Year, make a Mandatory Payment in
an aggregate amount equal to 50% (or, during the continuance
of an Event of Default, 100%) of such Annual Free Cash Flow;
provided, however, that the amount of such Mandatory Payment
shall be reduced by the amount of cash, if any, applied to
cash collateralize Letter of Credit Exposure pursuant to
subsection 2.4A(iii)(f) during the four Fiscal Quarters most
recently preceding the date of such Mandatory Payment.
(f) Excess Cash. Any amounts on deposit in the Cash
Management System (such amounts, in any event, not to include
amounts, if any, on deposit in the Collateral Accounts or
required to be held in Deposit Accounts which are Restricted
Accounts described on Schedule 2.4A(iii)(f) annexed hereto, as
said Schedule 2.4A(iii)(f) may be supplemented from time to
time pursuant to the provisions of subsection 6.1(xvii)) (the
aggregate of such amounts on deposit at any time (excluding
any amounts on deposit in accounts set forth on said Schedule
at such time) being referred to herein as "Cash On Hand") in
excess of $60,000,000 (plus the Closing Date Retained Amount)
for each Sweep Date (as defined below) in 2004 and 2005,
$70,000,000 (plus the Closing Date Retained Amount) for each
Sweep Date in 2006, $75,000,000 (plus the Closing Date
Retained Amount) for each Sweep Date in 2007 and $80,000,000
(plus the Closing Date Retained Amount) for each Sweep Date in
2008, on June 30 and December 31 of each of the aforementioned
years (each such date, a "Sweep Date"), shall be applied to
repay the Obligations and/or permanently reduce the
Commitments on the next succeeding Business Day in the
following manner: first, to Letter of Credit Exposure, with
the amount applied to Letter of Credit Exposure being applied
to repay all funded amounts, if any, under the Letters of
Credit and then to cash collateralize the Letter of Credit
Exposure outstanding after giving effect to the foregoing
repayment of all funded amounts under the Letters of Credit in
an amount, taken together with all then existing cash
collateral for such Letter of Credit Exposure, equal to 105%
of such Letter of Credit Exposure; second, to repay
outstanding Revolving Loans to the full extent thereof; and
third, to cash collateralize the unutilized Letter of Credit
Commitments in an amount, taken together with all then
existing cash collateral for such unutilized Letter of
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Credit Commitments, equal to 105% of such unutilized Letter of
Credit Commitment.
(g) Prepayments Due to Certain Changes of Control.
Upon the date on which any "change of control" or "change in
control" or event, however titled, shall occur that requires
under the High Yield Indenture a repurchase of the High Yield
Notes or an offer to repurchase High Yield Notes as a result
of a change in ownership of all or some portion of the Capital
Stock of Company or any of its Subsidiaries or all or
substantially all of the assets of Company and its
Subsidiaries, (1) Borrowers shall repay all funded amounts, if
any, under the Letters of Credit, then deposit into the
Collateral Account an amount equal to 105% of the Letter of
Credit Exposure outstanding after giving effect to the
foregoing repayment of all funded amounts under the Letters of
Credit and repay the principal balance of any outstanding
Revolving Loans, and (2) the right or obligation of Issuing
Lender to issue, renew or extend any Letter of Credit
hereunder shall terminate and the right or obligation of any
Lender to make any new Revolving Loans hereunder shall
terminate.
(h) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with the receipt of any amount which would
require a Mandatory Payment pursuant to subsections
2.4A(iii)(a) - (f), Company shall deliver to Administrative
Agent an Officer's Certificate demonstrating the calculation
of the amount of the applicable Net Asset Sale Proceeds, Net
Insurance/Condemnation Proceeds, Net Indebtedness Proceeds,
cash in the Cash Management System, Annual Free Cash Flow or
Tax refund or rebate, as the case may be, that gave rise to
such Mandatory Payment. In the event that Company shall
subsequently determine that the actual amount was greater than
the amount set forth in such Officer's Certificate, Company
shall promptly make an additional Mandatory Payment in an
amount equal to the amount of such excess, and Company shall
concurrently therewith deliver to Administrative Agent an
Officer's Certificate demonstrating the derivation of the
additional amount resulting in such excess.
(iv) Application of Prepayments; Reduction of Commitments.
(a) Application of Prepayments; Reduction of
Commitments. Except as provided in subsection 2.4C and the
last sentence of this subsection 2.4A(iv)(a) and to the extent
that the Intercreditor Agreement requires application of such
Mandatory Payment in a different manner than as set forth in
this sentence (it being understood that if a payment is made
in accordance with the terms of the Intercreditor Agreement, a
duplicate payment shall not be required hereunder and the
application required under the terms of the Intercreditor
Agreement shall apply as if set forth herein), (1) any
voluntary prepayments of the Revolving Loans made pursuant to
subsection 2.4A shall be applied to repay outstanding
Revolving Loans to the full extent thereof, and (2) the
aggregate amount of any Mandatory Payments
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made pursuant to subsections 2.4A(iii)(a) - (e) shall be
applied to repay the Obligations and/or permanently
reduce the Commitments in the following manner: first, to
Letter of Credit Exposure, with the amount applied to Letter
of Credit Exposure being applied to repay all funded amounts,
if any, under the Letters of Credit and then to cash
collateralize the Letter of Credit Exposure outstanding after
giving effect to the foregoing repayment of all funded amounts
under the Letters of Credit in an amount, taken together with
all then existing cash collateral for such Letter of Credit
Exposure, equal to 105% of such Letter of Credit Exposure;
second, to repay outstanding Revolving Loans to the full
extent thereof (and as a concurrent, permanent reduction of
(x) the unutilized Letter of Credit Commitments and (y) to the
extent that the unutilized Letter of Credit Commitments have
been reduced to an amount of $10,000,000 or less, the
Revolving Loan Commitments); and third, to permanently reduce
the unutilized Letter of Credit Commitments (and, to the
extent that the unutilized Letter of Credit Commitments have
been reduced to an amount of $10,000,000 or less, to
permanently and concurrently reduce the Revolving Loan
Commitments). Notwithstanding the foregoing, Borrowers and
Lenders hereby agree that any cash applied to collateralize
Letter of Credit Exposure pursuant to subsection 2.4A(iii)(f)
with respect to a cash balance on June 30 or December 31 of
any Fiscal Year (the "Subject Fiscal Year") shall in the event
that the amount of such cash applied to collateralize Letter
of Credit Exposure exceeds 50% of the Annual Free Cash Flow
for the Subject Fiscal Year, be released to Borrowers to the
extent of such excess (but in no event shall more cash be so
released than the aggregate amount applied pursuant to
subsection 2.4A(iii)(f) with respect to the Subject Fiscal
Year) after the 60th day of the following Fiscal Year,
promptly following Borrowers' certification of such excess;
provided, however, that such release shall not be required if,
at the time such release would otherwise be required, an Event
of Default shall have occurred and be continuing; and
provided, further, that to the extent that the Intercreditor
Agreement requires application of such amounts in a different
manner than as set forth in this sentence, such amounts shall
be applied in accordance with the Intercreditor Agreement.
(b) Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Any prepayment of Revolving Loans shall
be applied first to Base Rate Loans to the full extent thereof
before application to Eurodollar Rate Loans, in each case in a
manner which minimizes the amount of any payments required to
be made by Borrowers pursuant to subsection 2.6D.
(v) Mandatory Reduction of Letter of Credit Commitments.
Immediately upon the occurrence of any Permanent L/C Obligation
Reduction, the Letter of Credit Commitments shall be permanently
reduced in an amount equal to the amount of such Permanent L/C
Obligation Reduction, and such reduction of the Letter of Credit
Commitments shall reduce each Lender's Letter of Credit Commitment
ratably. In
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addition, the Commitments shall be reduced as specifically
provided in subsections 2.4A(ii), 2.4A(iii) and 2.4A(iv) above.
B. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Borrowers of
principal, interest, fees and other Obligations shall be made in
Dollars in same day funds, without defense, setoff or counterclaim,
free of any restriction or condition, and delivered to Administrative
Agent not later than 12:00 Noon (Chicago time) on the date due at the
Funding and Payment Office for the account of Lenders; funds received
by Administrative Agent after that time on such due date shall be
deemed to have been paid by Borrowers on the next succeeding Business
Day. Each Borrower hereby authorizes Administrative Agent to charge its
accounts with Administrative Agent in order to cause timely payment to
be made to Administrative Agent of all principal, interest, fees and
expenses due hereunder (subject to sufficient funds being available in
its accounts for that purpose). Anything contained herein to the
contrary notwithstanding, Borrowers jointly and severally promise to
repay all Revolving Loans and honored drawings under the Letters of
Credit when due in accordance with the terms hereof and agree that, to
the extent any Letters of Credit have not been returned and cancelled,
on the Maturity Date (a) the unpaid principal amount of, and accrued
interest on, any funded amounts under such Letters of Credit and on any
Revolving Loans, (b) an amount equal to the maximum available amount
that may at any time on or after such date be drawn under all such
Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or
certificates required to draw under such Letter of Credit), and (c) all
other Obligations shall automatically become immediately due and
payable, without presentment, demand, protest or other requirements of
any kind, all of which are hereby expressly waived by Borrowers, and
any amounts so due and payable with respect to Letters of Credit shall
be cash collateralized in an amount equal to 105% of the amount
thereof.
(ii) Application of Payments to Principal and Interest. All
payments in respect of the principal amount of any Revolving Loan or
any honored drawing under a Letter of Credit shall include payment of
accrued interest on the principal amount being repaid or prepaid, and
all such payments (and, in any event, any payments in respect of any
Revolving Loan on a date when interest is due and payable with respect
to such Revolving Loan) shall be applied to the payment of interest
before application to principal.
(iii) Apportionment of Payments. Aggregate payments of
principal and interest shall be apportioned among all outstanding
Revolving Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares. Administrative
Agent shall promptly distribute to each Lender, at its primary address
set forth below its name on the appropriate signature page hereof or at
such other address as such Lender may request, its Pro Rata Share of
all such payments received
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by Administrative Agent and the commitment fees and letter of credit
fees of such Lender, if any, when received by Administrative Agent
pursuant to subsection 2.3 and subsection 3.2. Notwithstanding the
foregoing provisions of this subsection 2.4B(iii), if, pursuant to the
provisions of subsection 2.6C, any Notice of Conversion/Continuation is
withdrawn as to any Affected Lender or if any Affected Lender makes
Base Rate Loans in lieu of its Pro Rata Share of any Eurodollar Rate
Loans, Administrative Agent shall give effect thereto in apportioning
payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment
fees hereunder, as the case may be.
C. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS AFTER
EVENT OF DEFAULT. Except to the extent that the Intercreditor Agreement requires
application in a different manner than as set forth in this subsection 2.4C,
upon the occurrence and during the continuation of an Event of Default, either
if requested by Requisite Lenders or upon termination of the Commitments (a) all
Mandatory Payments or other payments received on account of the Obligations,
whether from any Borrower or otherwise, shall be applied by Administrative Agent
against the Obligations and (b) all proceeds received by Administrative Agent in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral may, in the discretion of Administrative Agent, be held
by Administrative Agent as Collateral for, and/or (then or at any time
thereafter) applied in full or in part by Administrative Agent against, the
applicable Secured Obligations (as defined in the Collateral Documents), in each
case in the following order of priority:
(i) to the payment of all costs and expenses of such sale,
collection or other realization, all other expenses, liabilities and
advances made or incurred by Administrative Agent in connection
therewith, and all amounts for which Administrative Agent is entitled
to compensation (including the fees described in subsection 2.3),
reimbursement and indemnification under any Credit Document and all
advances made by Administrative Agent thereunder for the account of the
applicable Credit Party, and to the payment of all costs and expenses
paid or incurred by Administrative Agent in connection with the Credit
Documents, all in accordance with subsections 9.4, 10.2 and 10.3 and
the other terms of this Agreement and the Credit Documents;
(ii) thereafter, to the extent of any excess such proceeds,
ratably to repay owed and outstanding amounts (subject to the
provisions of subsection 2.4B(ii) hereof) with respect to Revolving
Loan Exposure and Letter of Credit Exposure, with the remainder applied
to cash collateralize Letter of Credit Exposure and unutilized Letter
of Credit Commitments (it being understood that for purposes of
determining the ratable portion of such excess proceeds to be applied
to Letter of Credit Exposure, the portion of such Letter of
-54-
Credit Exposure that consists of unutilized Letter of Credit
Commitments or undrawn amounts under outstanding Letters of Credit
shall be measured at 105% of the amount thereof), for the ratable
benefit of the holders thereof; and
(iii) thereafter, to the extent of any excess such proceeds,
to the payment to or upon the order of such Credit Party or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
2.5. USE OF PROCEEDS.
A. REVOLVING LOANS. The proceeds of any Revolving Loans shall
be applied by Borrowers to fund working capital requirements and general
corporate purposes. Borrowers shall use the entire amount of the proceeds of
each Revolving Loan in accordance with this subsection 2.5A.
B. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by any Borrower or any Subsidiary
of any Borrower in any manner that might cause the borrowing or the application
of such proceeds to violate Regulation U, Regulation T or Regulation X of the
Board of Governors of the Federal Reserve System or any other regulation of such
Board or to violate the Exchange Act, in each case as in effect on the date or
dates of such borrowing and such use of proceeds.
2.6. SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. On each Interest
Rate Determination Date, Administrative Agent shall determine in accordance with
the terms of this Agreement (which determination shall, absent manifest error,
be conclusive and binding upon all parties) the interest rate that shall apply
to the Eurodollar Rate Loans for which an interest rate is then being determined
for the applicable Interest Period and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to Borrowers and each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the
event that Administrative Agent shall have determined (which determination shall
be conclusive and binding upon all parties hereto) on any Interest Rate
Determination Date that by reason of circumstances affecting the interbank
Eurodollar market adequate and fair means do not exist for ascertaining the
interest rate applicable to such Revolving Loans on the basis provided for in
the definition of Eurodollar Rate, Administrative Agent shall on such date give
notice (by telefacsimile or by telephone confirmed in writing) to Borrowers and
each Lender of such determination, whereupon (i) no Revolving Loans may be made
as, or converted to, Eurodollar Rate Loans until such time as Administrative
Agent notifies Borrowers and Lenders that the circumstances giving rise to such
notice no longer exist and (ii) any Notice
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of Borrowing or Notice of Conversion/Continuation given by Borrowers with
respect to the Revolving Loans in respect of which such determination was made
shall be deemed to be for a Base Rate Loan.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In
the event that on any date any Lender shall have determined (which determination
shall be conclusive and binding upon all parties hereto but shall be made only
after consultation with Borrowers and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful
as a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the interbank Eurodollar market or the position
of such Lender in that market, then, and in any such event, such Lender shall be
an "AFFECTED LENDER" and it shall on that day give notice (by telefacsimile or
by telephone confirmed in writing) to Borrowers and Administrative Agent of such
determination. Administrative Agent shall promptly notify each other Lender of
the receipt of such notice. Thereafter (a) the obligation of the Affected Lender
to make Revolving Loans as, or to convert Revolving Loans to, Eurodollar Rate
Loans shall be suspended until such notice shall be withdrawn by the Affected
Lender, (b) to the extent such determination by the Affected Lender relates to a
Eurodollar Rate Loan then being requested by Borrowers pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall make
such Revolving Loan as (or convert such Revolving Loan to, as the case may be) a
Base Rate Loan, (c) the Affected Lender's obligation to maintain its outstanding
Eurodollar Rate Loans (the "AFFECTED LOANS") shall be terminated at the earlier
to occur of the expiration of the Interest Period then in effect with respect to
the Affected Loans or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a Eurodollar Rate Loan then being requested
by Borrowers pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, Borrowers shall have the option, subject to the
provisions of subsection 2.2D, to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Lenders by giving notice (by telefacsimile or
by telephone confirmed in writing) to Administrative Agent of such rescission on
the date on which the Affected Lender gives notice of its determination as
described above. Administrative Agent shall promptly notify each other Lender of
the receipt of such notice. Except as provided in the immediately preceding
sentence, nothing in this subsection 2.6C shall affect the obligation of any
Lender other than an Affected Lender to make or maintain Revolving Loans as, or
to convert Revolving Loans to, Eurodollar Rate Loans in accordance with the
terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Borrowers shall, jointly and severally, compensate each Lender (or, if
applicable, Administrative Agent), upon written request by such Person, for all
reasonable losses,
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expenses and liabilities (including any interest paid by such Person to lenders
of funds borrowed by it to make or carry its Eurodollar Rate Loans and any loss,
expense or liability sustained by such Person in connection with the liquidation
or re-employment of such funds) which such Person may sustain: (i) if for any
reason (other than a default by such Person) a borrowing of any Eurodollar Rate
Loan does not occur on a date specified therefor in a Notice of Borrowing or a
telephonic request therefor, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request therefor, (ii) if any prepayment
(including any prepayment or conversion occasioned by the circumstances
described in subsection 2.6C) or other principal payment or any conversion of
any of its Eurodollar Rate Loans occurs on a date prior to the last day of an
Interest Period applicable to that Loan, (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by Borrowers, or (iv) as a consequence of any other default by
Borrowers in the repayment of Eurodollar Rate Loans when required by the terms
of this Agreement.
2.7. INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS. Subject to the provisions
of subsection 2.4B (which shall be controlling with respect to the matters
covered thereby), in the event that any Lender (including Issuing Lender) shall
determine (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or other Government Authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other Government Authority (whether or not having the force of
law):
(i) subjects such Lender to any additional Tax (other than any
withholding tax with respect to which subsection 2.7B applies) with
respect to this Agreement or any of its obligations hereunder
(including with respect to issuing or maintaining any Letters of Credit
or purchasing or maintaining any participations therein or maintaining
any Letter of Credit Commitment hereunder) or any payments to such
Lender of principal, interest, fees or any other amount payable
hereunder;
(ii) imposes, modifies or holds applicable any reserve,
special deposit, compulsory loan, insurance charge or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect
to Eurodollar Rate Loans that are reflected in the definition of
Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to
Taxes) on or affecting such Lender or its obligations hereunder or the
interbank Eurodollar market;
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and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining its Revolving Loans or Commitments or
agreeing to issue, issuing or maintaining any Letter of Credit or agreeing to
purchase, purchasing or maintaining any participation therein or to reduce any
amount received or receivable by such Lender with respect thereto; then, in any
such case, Borrowers shall promptly pay, on a joint and several basis, to such
Lender, upon receipt of the statement referred to in subsection 2.8A, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
on an after-tax basis for any such increased cost or reduction in amounts
received or receivable hereunder.
B. TAXES.
(i) Payments to Be Free and Clear. All sums payable by
Borrowers under this Agreement and the other Credit Documents shall be
paid free and clear of, and without any deduction or withholding on
account of, any Tax imposed, levied, collected, withheld or assessed by
or within the United States or any political subdivision in or of the
United States or any other jurisdiction from or to which a payment is
made by or on behalf of Borrowers or by any federation or organization
of which the United States or any such jurisdiction is a member at the
time of payment.
(ii) Grossing-up of Payments. If any Borrower or any other
Person is required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by Borrowers to
Administrative Agent or any Lender under any of the Credit Documents:
(a) Borrowers shall notify Administrative Agent of
any such requirement or any change in any such requirement as
soon as Borrowers become aware of it;
(b) Borrowers shall pay any such Tax when such Tax is
due, such payment to be made (if the liability to pay is
imposed on any Borrower) for their own account or (if that
liability is imposed on Administrative Agent or such Lender,
as the case may be) on behalf of and in the name of
Administrative Agent or such Lender;
(c) the sum payable by Borrowers in respect of which
the relevant deduction, withholding or payment is required
shall be increased to the extent necessary to ensure that,
after the making of that deduction, withholding or payment,
Administrative Agent or such Lender, as the case may be,
receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been
required or made; and
(d) within 30 days after paying any sum from which
any or all of them are required by law to make any deduction
or withholding, and within 30 days after the due date of
payment of any Tax which any or all of them are
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required by clause (b) above to pay, Borrowers shall deliver
to Administrative Agent evidence satisfactory to the
other affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant taxing
or other authority.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of
any jurisdiction other than the United States or any state or
other political subdivision thereof (for purposes of this
subsection 2.4B(iii), a "NON-US LENDER") shall deliver to
Administrative Agent and to Company, on or prior to the
Closing Date (in the case of any Non-U.S. Lenders listed on
the signatures pages hereto on the date hereof) or on or prior
to the date of the Assignment Agreement pursuant to which it
becomes a Lender (in the case of each other Non-U.S. Lender),
and at such other times as may be necessary in the
determination of Company or Administrative Agent (each in the
reasonable exercise of its discretion), two original copies of
Internal Revenue Service Form W-8BEN or W-8ECI (or any
successor forms) properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is
not subject to United States withholding tax with respect to
any payments to such Lender of interest payable under any of
the Credit Documents.
(b) Each Non-US Lender hereby agrees, from time to
time after the initial delivery by such Lender of such forms,
whenever a lapse in time or change in circumstances renders
such forms, certificates or other evidence so delivered
obsolete or inaccurate in any material respect, that such
Lender shall promptly (1) deliver to Administrative Agent and
to Company two original copies of renewals, amendments or
additional or successor forms, properly completed and duly
executed by such Lender, together with any other certificate
or statement of exemption required in order to confirm or
establish that such Lender is not subject to United States
withholding tax with respect to payments to such Lender under
the Credit Documents or (2) notify Administrative Agent and
Company of its inability to deliver any such forms,
certificates or other evidence.
(c) Borrowers shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii) if such Lender shall have failed to
satisfy the requirements of clause (a) or (b)(1) of this
subsection 2.7B(iii); provided, that if such Lender shall have
satisfied the requirements of subsection 2.7B(iii)(a) on the
date such Lender became a Lender, nothing in this subsection
2.7B(iii)(c) shall relieve Borrowers of their obligation to
pay any amounts pursuant to subsection 2.7B(ii)(c) in the
event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any
change in the interpretation, administration or
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application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender is not
subject to withholding as described in subsection
2.7B(iii)(a).
(iv) Indemnity for Withheld Amounts. Borrowers hereby agree to
indemnify Lenders and Administrative Agent for the full amount of any
deduction or withholding on account of any Taxes imposed, levied,
collected, withheld or assessed by or within the United States or any
political subdivision in or of the United States or any other
jurisdiction from or to which a payment is made by or on behalf of
Borrowers or by any federation or organization of which the United
States or any such jurisdiction is a member at the time of payment
(including any such Taxes imposed by any jurisdiction on amounts
payable under this subsection 2.7B) that Borrowers are required to pay
pursuant to subsection 2.7B(ii) but were paid by Administrative Agent
or Lenders with respect to sums payable by Borrowers under this
Agreement and the other Credit Documents and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made promptly, and in any event
within 10 days after, the relevant Lender or Administrative Agent makes
demand therefor in writing.
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after the
date hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any Government Authority charged with the
interpretation or administration thereof, or compliance by any Lender with any
guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such Government Authority, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Revolving Loans, Commitments, Letters of Credit, participations
therein or other Obligations to a level below that which such Lender or such
controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within 5 Business Days
after receipt by Borrowers from such Lender of the statement referred to in
subsection 2.8A, Borrowers shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction.
2.8. STATEMENT OF LENDERS; OBLIGATION OF LENDERS AND ISSUING LENDER
TO MITIGATE.
A. STATEMENTS. Each Lender claiming compensation or
reimbursement pursuant to subsection 2.6, 2.7 or 2.8B shall deliver to Company
(with a copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis of the calculation of such compensation or
reimbursement, which statement shall be conclusive and binding upon all parties
hereto absent manifest error; provided, that a Lender claiming
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compensation or reimbursement pursuant to subsection 2.7B(ii) due to
circumstances in effect as of the Closing Date shall not be required to deliver
more than one such statement to Borrowers or Administrative Agent, and such
statement shall remain effective with respect to this Agreement until all
Obligations have been paid in full.
B. MITIGATION. Each Lender (including Issuing Lender) agrees
that, as promptly as practicable after the officer of such Lender or Issuing
Lender responsible for administering the Revolving Loans or Letters of Credit of
such Lender or Issuing Lender, as the case may be, becomes aware of the
occurrence of an event or the existence of a condition that would entitle such
Lender or Issuing Lender to receive payments under subsection 2.4 (other than
subsection 2.7B(ii)), it will use reasonable efforts to make, issue, fund or
maintain the Letter of Credit Commitments of such Lender or the Revolving Loans
or Letters of Credit of such Lender or Issuing Lender through another lending or
letter of credit office of such Lender or Issuing Lender, if (i) as a result
thereof the additional amounts which would otherwise be required to be paid to
such Lender or Issuing Lender pursuant to subsection 2.7 would be materially
reduced and (ii) as determined by such Lender or Issuing Lender in its sole
discretion, such action would not otherwise be disadvantageous to such Lender or
Issuing Lender; provided, that such Lender or Issuing Lender will not be
obligated to utilize such other lending or letter of credit office pursuant to
this subsection 2.8B unless Borrowers agree to pay, on a joint and several
basis, all incremental expenses incurred by such Lender or Issuing Lender as a
result of utilizing such other lending or letter of credit office as described
above.
2.9. DEFAULTING LENDER
Anything contained herein to the contrary notwithstanding, in
the event that any Lender (any such Lender being a "DEFAULTING LENDER") defaults
(a "FUNDING DEFAULT") in its obligation to fund its participation in any Letter
of Credit (a "DEFAULTED PARTICIPATION") or to fund any Revolving Loan (a
"DEFAULTED LOAN") in accordance with the terms of this Agreement, then (i)
during any Default Period (as defined below) with respect to such Defaulting
Lender, such Defaulting Lender shall not be deemed a "Lender" for purposes of
voting on any matters (including the granting of any consents or waivers) with
respect to any of the Credit Documents (provided, however, that nothing in this
clause (i) shall be construed as permitting, without the consent of the relevant
Defaulting Lender, a reduction in the principal amount of such Defaulting
Lender's funded Revolving Loans or other outstanding funded Obligations, an
increase in the amount of such Lender's Revolving Loan Commitment or Letter of
Credit Commitment or participation in any Letters of Credit, a reduction or
postponement of the due date of any amount funded by such Defaulting Lender and
payable in respect of any Letter of Credit, an extension of the expiration date
of any Letter of Credit beyond the Maturity Date, or an extension of the
Maturity Date), (ii) to the extent permitted by applicable law, until such time
as the Default Excess (as defined below) with respect to such Defaulting Lender
shall have been reduced to zero, any payment of amounts with respect to the
Revolving Loans and any payment or reimbursement of amounts with respect to a
drawing under a Letter of Credit shall be applied first, to amounts funded by
Administrative Agent, Issuing Lender or other Lenders (together with unpaid
interest accrued thereon) in lieu of such amounts required to be funded by
Defaulting
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Lenders and second, to the Revolving Loans or Letter of Credit participations,
as the case may be, of other Lenders (other than any other Defaulting Lenders)
as if such Defaulting Lender (and any other Defaulting Lenders) had no Revolving
Loans outstanding and the Credit Exposure of such Defaulting Lender were zero,
(iii) such Defaulting Lender's Commitments, Revolving Loans and Pro Rata Share
with respect thereto shall be excluded for purposes of calculating the
commitment fee in respect of any day during any Default Period with respect to
such Defaulting Lender, such Defaulting Lender's Commitments, Revolving Loans
and Pro Rata Shares with respect thereto shall be excluded for purposes of
calculating the letter of credit fees under subsection 3.2 in respect of any day
during any Default Period with respect to such Defaulting Lender, and such
Defaulting Lender shall not be entitled to receive any such commitment fee or
letter of credit fee with respect to such Defaulting Lender's Commitments in
respect of any Default Period with respect to such Defaulting Lender, and (iv)
the Credit Utilization as at any date of determination shall be calculated as if
such Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender.
For purposes of this Agreement, (I) "DEFAULT PERIOD" means,
with respect to any Defaulting Lender, the period commencing on the date of the
applicable Funding Default and ending on the earliest of the following dates:
(A) the date on which all Commitments are cancelled or terminated and/or the
Obligations are declared or become immediately due and payable, (B) the date on
which (1) the Default Excess with respect to such Defaulting Lender shall have
been reduced to zero (whether by the funding by such Defaulting Lender of any
Defaulted Loans or Defaulted Participations, as the case may be, of such
Defaulting Lender or by the non-pro rata application of any payments of amounts
with respect to the Revolving Loans or any payments or reimbursements of amounts
with respect to drawings under Letters of Credit in accordance with the terms
hereof or any combination thereof), and (2) such Defaulting Lender shall have
delivered to Company and Administrative Agent a written reaffirmation of its
intention to honor its obligations under this Agreement with respect to its
Commitments, and (C) the date on which Company, Administrative Agent and Issuing
Lender waive all Funding Defaults of such Defaulting Lender in writing, and (II)
"DEFAULT EXCESS" means, with respect to any Defaulting Lender, the excess, if
any, of (x) such Defaulting Lender's applicable Pro Rata Share of the aggregate
outstanding principal amount of Revolving Loans of all Lenders and all funded
participations in Letters of Credit of Lenders (calculated as if all Defaulting
Lenders (other than such Defaulting Lender) had funded all of their respective
Defaulted Loans and Defaulted Participations) over (y) the aggregate outstanding
principal amount of Revolving Loans of such Defaulting Lender and the aggregate
funded amount of such Defaulting Lender's participations in Letters of Credit.
No Commitment of any Lender shall be increased or otherwise
affected, and, except as otherwise expressly provided in this subsection 2.9,
performance by any Borrower of its obligations under this Agreement and the
other Credit Documents shall not be excused or otherwise modified, as a result
of any Funding Default or the operation of this subsection 2.9. The rights and
remedies against a Defaulting Lender under this subsection 2.9 are in addition
to other rights and remedies that Borrowers may have against such Defaulting
Lender with respect to any Funding Default and that Administrative Agent,
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Issuing Lender or any Lender may have against such Defaulting Lender with
respect to any Funding Default.
2.10. JOINT AND SEVERAL LIABILITY; PAYMENT INDEMNIFICATIONS.
A. JOINT AND SEVERAL OBLIGATIONS. All Obligations of Borrowers
under the Credit Documents shall be the joint and several Obligations of each
Borrower.
B. NO IMPAIRMENT OR RELEASE. The Obligations of and the Liens
granted by any Borrower under the Credit Documents shall not be impaired or
released by any action or inaction on the part of Administrative Agent or any
Lender with respect to any other Credit Party, including any action or inaction
which would otherwise release a surety.
C. CONTRIBUTION RIGHTS. In order to provide for just and
equitable contribution among Borrowers if any payment is made by a Borrower (a
"FUNDING BORROWER") in discharging any of the Obligations, that Funding Borrower
shall be entitled to a contribution from the other Borrowers for all payments,
damages and expenses incurred by that Funding Borrower in discharging the
Obligations, in the manner and to the extent required to allocate liabilities in
an equitable manner among Borrowers on the basis of the relative benefits
received by Borrowers. If and to the extent that a Funding Borrower makes any
payment to any Lender or any other Person in respect of the Obligations, any
claim which said Funding Borrower may have against the other Borrowers by reason
thereof shall be subject and subordinate to the prior cash payment in full of
the Obligations. The parties hereto acknowledge that the right to contribution
hereunder shall constitute an asset of the party to which such contribution is
owing and shall be subject to the Liens and security interests of the
Administrative Agent. Notwithstanding any of the foregoing to the contrary, such
contribution arrangements shall not limit in any manner the joint and several
nature of the Obligations, limit, release or otherwise impair any rights of
Administrative Agent or any Lender under the Credit Documents, or alter, limit
or impair the obligation of each Borrower, which is absolute and unconditional,
to repay the Obligations.
2.11. RIGHTS OF SUBROGATION, CONTRIBUTION, ETC.
Except as prohibited under applicable law, Company hereby
waives any claim, right or remedy, direct or indirect, that Company now has or
may hereafter have against any other Borrower or any guarantor of the
Obligations in connection with this Agreement or the performance by Company of
its obligations hereunder, in each case whether such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise and
including (a) any right of subrogation, reimbursement or indemnification that
Company now has or may hereafter have against any other Borrower or guarantor of
the Obligations, (b) any right to enforce, or to participate in, any claim,
right or remedy that Administrative Agent or any Lender now has or may hereafter
have against any other Borrower or guarantor of the Obligations, and (c) any
benefit of, and any right to participate in, any collateral or security now or
hereafter held by Administrative Agent or any Lender. In addition, until the
Obligations shall have been indefeasibly paid in full and all Commitments shall
have terminated and all Letters of Credit shall have expired or been cancelled,
Company shall
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withhold exercise of any right of contribution Company may have against any
other Borrower or Credit Party. Company further agrees that, to the extent the
waiver or agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification Company may have against
any other Borrower or Credit Party or against any collateral or security shall
be junior and subordinate to any rights Administrative Agent or any Lender may
have against any other Borrower, to all right, title and interest Administrative
Agent or any Lender may have in any such collateral or security, and to any
right Administrative Agent or any Lender may have against such Credit Party. If
any amount shall be paid to Company on account of any such subrogation,
reimbursement, indemnification or contribution rights at any time when all
Obligations shall not have been paid in full, such amount shall be held in trust
for Administrative Agent on behalf of Administrative Agent and Lenders and shall
forthwith be paid over to Administrative Agent for the benefit of Administrative
Agent and Lenders to be credited and applied against the Obligations, whether
matured or unmatured, in accordance with the terms hereof.
SECTION 3. LETTERS OF CREDIT
3.1. LETTER OF CREDIT COMMITMENTS; ISSUANCE OF LETTERS OF CREDIT
AND LENDERS' PURCHASE OF PARTICIPATIONS THEREIN.
A. LETTERS OF CREDIT.
Borrowers may request, in accordance with the provisions of
this subsection 3.1, from time to time during the period from the Closing Date
to but excluding the 30th day prior to the Maturity Date, that Issuing Lender
issue Letters of Credit for the account of Borrowers (in the case of Closing
Date Letters of Credit, for the purposes of supporting obligations of the type
set forth on Schedule 3.1A(i) annexed hereto, and, in the case of all other
Letters of Credit, for the purposes described in subsection 3.1B(ii)(b)). The
original amount of each Lender's Letter of Credit Commitment is set forth
opposite its name on Schedule 2.1 annexed hereto and the aggregate original
amount of the Letter of Credit Commitments is $118,000,000; provided, however,
that the Letter of Credit Commitments of Lenders shall be adjusted to give
effect to any assignments of the Letter of Credit Commitments pursuant to
subsection 10.1B and shall be reduced from time to time by the amount of any
reductions thereto made pursuant to subsection 2.4. Notwithstanding anything
herein to the contrary, Borrowers shall not request that Issuing Lender issue
(and Issuing Lender shall not issue) any Letter of Credit:
(a) if, after giving effect to such issuance, the
aggregate Credit Utilization would exceed the aggregate Letter
of Credit Commitments then in effect;
(b) with respect to Closing Date Letters of Credit
only, if the obligations to be supported by such Letter of
Credit are not of a type identified on Schedule 3.1A(i)
annexed hereto;
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(c) with respect to Closing Date Letters of Credit
only, if, after giving effect to such issuance, the maximum
aggregate amount which is or at any time thereafter may be
available for drawing under Letters of Credit issued to
support an obligation of a type identified on Schedule 3.1A(i)
annexed hereto would exceed the correlative amount set forth
for such obligation on such Schedule (as such amount may be
reduced from time to time pursuant to subsection 2.4A(v));
(d) having an expiration date later than the earlier
of (a) the 5th Business Day prior to the Maturity Date and (b)
the date which is three years from the date of issuance of
such Letter of Credit; provided that the immediately preceding
clause (b) shall not prevent Issuing Lender from agreeing that
a Letter of Credit will automatically be extended to a date
not later than the 5th Business Day prior to the Maturity Date
unless Issuing Lender elects not to extend for any such
additional period; and provided, further that Issuing Lender
shall elect not to extend such Letter of Credit if it has
knowledge that an Event of Default has occurred and is
continuing (and has not been waived in accordance with
subsection 10.6) at the time Issuing Lender must elect whether
or not to allow such extension (with it being agreed and
understood that Issuing Lender shall provide Borrowers with
prompt notice of any such extension of a Letter of Credit
having been denied); or
(e) denominated in a currency other than Dollars.
B. MECHANICS OF ISSUANCES.
(i) Issuance of Closing Date Letters of Credit on the Closing
Date. Issuing Lender shall, on or about the Closing Date, issue the
Closing Date Letters of Credit as follows: (1) Issuing Lender shall
issue the Montgomery Letter of Credit, (2) Issuing Lender shall issue
the Back-Up Closing Date Letters of Credit and (3) Issuing Lender shall
issue the Replacement Closing Date Letters of Credit upon Issuing
Lender's receipt of evidence satisfactory to it that the DIP Tranche A
L/Cs and DIP Tranche B L/Cs being replaced by such Replacement Closing
Date Letters of Credit are concurrently therewith being returned
undrawn and cancelled.
(ii) Request for Issuance of Letter of Credit.
(a) Letters of Credit to Replace Closing Date Letters
of Credit. After the issuance of any Closing Date Letter of
Credit, whenever Borrowers desire to have Issuing Lender issue
a Letter of Credit to extend or replace such outstanding
Closing Date Letter of Credit (or, in the case of a Back-Up
Closing Date Letter of Credit, to replace such Back-Up Closing
Date Letter of Credit and the corresponding DIP Tranche A L/C
or DIP Tranche B L/C), or Administrative Agent requests (with
a copy of such request to Company) that Issuing Lender issue a
Letter of Credit to extend or to replace such outstanding
Closing Date Letter of Credit (or, in the case of a Back-Up
Closing Date Letter of Credit, to replace such Back-Up Closing
Date Letter
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of Credit and the corresponding DIP Tranche A L/C or DIP
Tranche B L/C), Borrowers shall deliver to Issuing Lender (and
Administrative Agent, if Administrative Agent is not such
Issuing Lender) a Request for Issuance no later than 12:00
Noon (Chicago time) at least 10 Business Days (or in each case
such shorter period as may be agreed to by Administrative
Agent in any particular instance) in advance of the proposed
date of issuance, which Request for Issuance shall describe
the relevant Closing Date Letter of Credit and the verbatim
text of the Letter of Credit proposed to be issued or of such
extension, as the case may be, and shall specify such proposed
date of issuance or extension; provided, that Borrowers shall
not request that Issuing Lender issue or extend (and Issuing
Lender shall not issue or extend) any such Letter of Credit:
(1) if the underlying Contractual Obligation to
provide any such Closing Date Letter of Credit or a
replacement thereto to the beneficiary thereof (or, in the
case of a Back-Up Closing Date Letter of Credit, the
beneficiary of the DIP Tranche A L/C or DIP Tranche B L/C to
which such Back-Up Closing Date Letter of Credit corresponds)
has terminated, and/or the beneficiary of such Closing Date
Letter of Credit (or, in the case of a Back-Up Closing Date
Letter of Credit, the beneficiary of the DIP Tranche A L/C or
DIP Tranche B L/C to which such Back-Up Closing Date Letter of
Credit corresponds) has otherwise returned the same for
cancellation without the expectation that a Letter of Credit
will be issued contemporaneously with such cancellation in
substitution therefor;
(2) if the terms of such Letter of Credit as so
replaced or extended (other than the stated amount and
expiration date thereof) are not substantially identical to
the terms of the corresponding Closing Date Letter of Credit
being replaced or extended (it being agreed and understood
that any such Letter of Credit issued to replace a Back-Up
Closing Date Letter of Credit and the DIP Tranche A L/C or DIP
Tranche B L/C to which it corresponds shall have as its
beneficiary the beneficiary of such DIP Tranche A L/C or DIP
Tranche B L/C but shall otherwise comply with the requirements
of this clause (2)); or
(3) if the stated amount of such Letter of Credit as
so replaced or extended exceeds the stated amount of the
corresponding Closing Date Letter of Credit being replaced or
extended, as the case may be.
(b) Letters of Credit Not to Replace Closing Date
Letters of Credit. Whenever Borrowers desire the issuance of a
Letter of Credit (other than a Closing Date Letter of Credit),
they shall deliver to Issuing Lender (and Administrative
Agent, if Administrative Agent is not such Issuing Lender) a
Request for Issuance no later than 12:00 Noon (Chicago time)
at least 10 Business Days, or in each case such shorter period
as may be agreed to by Administrative Agent in any particular
instance, in advance of the proposed date of issuance. Upon
receipt by Issuing Lender (and Administrative Agent,
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if Administrative Agent is not such Issuing Lender) of a
Request for Issuance pursuant to this subsection 3.1B(ii)(b)
requesting the issuance of a Letter of Credit, Issuing Lender
shall be the Issuing Lender with respect thereto. In respect
of a Letter of Credit requested pursuant to this subsection
3.1B(ii)(b), Issuing Lender, in its reasonable discretion, may
require changes in the text of a proposed Letter of Credit or
any documents described in or attached to the relevant Request
for Issuance so long as any such changes do not conflict with
the applicable requirements of the Contractual Obligation to
provide such Letter of Credit. Letters of Credit requested
pursuant to this subsection 3.1B(ii)(b) shall be used solely
for general corporate purposes. No Letter of Credit requested
pursuant to this subsection 3.1B(ii)(b) shall require payment
against a conforming demand for payment to be made thereunder
on the same Business Day (under the laws of the jurisdiction
in which the office of Issuing Lender to which such demand for
payment is required to be presented is located) that such
demand for payment is presented if such presentation is made
after 10:00 A.M. (in the time zone of such office of Issuing
Lender) on such Business Day.
(iii) Recertification. Borrowers shall notify Issuing
Lender (and Administrative Agent, if Administrative Agent is
not such Issuing Lender) prior to the issuance or extension of
any Letter of Credit in the event that any of the matters to
which Borrowers are required to certify in the applicable
Request for Issuance is no longer true and correct as of the
proposed date of issuance or extension of such Letter of
Credit, and upon the issuance or extension of any Letter of
Credit Borrowers shall be deemed to have re-certified, as of
the date of such issuance or extension, as to the matters to
which Borrowers are required to certify in the applicable
Request for Issuance (except to the extent such requirement to
re-certify as to such matters shall have been waived in
accordance with subsection 10.6 hereof).
(iv) Issuance of Letter of Credit. Upon satisfaction
or waiver (in accordance with subsection 10.6) of the
conditions set forth in subsection 4.3, Issuing Lender shall
issue the requested Letter of Credit in accordance with
Issuing Lender's standard operating procedures.
(v) Notification to Lenders. No later than 10
Business Days prior to the decision to extend or reissue any
Letter of Credit, Issuing Lender shall notify Administrative
Agent in writing of the date on which Issuing Lender expects
such decision will be made and of the date by which such
decision must be made in order to avoid a drawing under such
Letter of Credit. Promptly after the issuance, amendment or
extension of any Letter of Credit Issuing Lender shall
promptly notify Administrative Agent and each Lender of such
issuance, amendment or extension in writing. Upon receipt of
such notice (or, if Administrative Agent is the Issuing
Lender, together with such notice), Administrative Agent shall
notify each Lender in writing of the amount of such Lender's
respective participation in such Letter of Credit, determined
in accordance with subsection 3.1C and, if so requested by a
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Lender, Administrative Agent shall provide such Lender with a
copy of such Letter of Credit, amendment or extension.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT.
Immediately upon the issuance of each Letter of Credit, each Letter of Credit
Lender shall be deemed to, and hereby agrees to, have irrevocably purchased from
Issuing Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Letter of Credit Lender's Pro Rata Share
(with respect to Letter of Credit Exposure) of the maximum amount which is or at
any time may become available to be drawn thereunder.
3.2. LETTER OF CREDIT FEES.
Borrowers jointly and severally agree to pay,
(i) with respect to each Letter of Credit, a letter of credit
fee, payable to Administrative Agent for the account of Administrative
Agent and Lenders (with the allocation among Administrative Agent and
Lenders to be as set forth in the Inter-Lender Agreement and the
allocation among Lenders to be in proportion to their respective Pro
Rata Shares), equal to 6.50% per annum (expressed as a daily rate)
multiplied by the daily amount available to be drawn under such Letter
of Credit, each such letter of credit fee to be payable in arrears on
and to (but excluding) the last day of each fiscal quarter and computed
on the basis of a 360-day year, for the actual number of days elapsed,
and
(ii) with respect to the issuance, negotiation, amendment or
transfer of each Letter of Credit and each payment of a drawing made
thereunder (without duplication of the fees payable under clause (i)
above), Borrowers jointly and severally agree to pay customary
processing documentation and other like charges payable directly to
Issuing Lender (and, if applicable, to any confirming bank) for its own
account in accordance with Issuing Lender's (and, if applicable, such
confirming bank's) standard schedule for such charges in effect at the
time of such issuance, amendment, transfer or payment, as the case may
be.
For purposes of calculating any fees payable under this
subsection 3.2, the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination. Promptly upon receipt by Administrative Agent of any amount
described in clause (ii) of this subsection 3.2 with respect to a Letter of
Credit, Administrative Agent shall distribute to each Lender its Pro Rata Share
of such amount. All fees referenced in this subsection 3.2 shall be earned when
payable and shall be non-refundable. Upon the occurrence and during the
continuation of any Event of Default and notice from Administrative Agent to
Borrowers, all fees set forth in this subsection 3.2 shall accrue at a rate that
is 2.00% per annum in excess of the rate otherwise set forth in this subsection
and shall, if Administrative Agent so requests, be payable upon demand. Payment
or acceptance of the increased rates provided for in this paragraph shall not
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constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Administrative Agent or any Lender.
3.3. DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF
CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS.
In determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in compliance with the terms
and conditions of such Letter of Credit.
B. REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT. In
the event Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, Issuing Lender shall immediately notify Borrowers and
Borrowers shall reimburse Issuing Lender on or before the Business Day
immediately following the date on which such drawing is honored (the
"REIMBURSEMENT DATE") in an amount in Dollars and in same day funds equal to the
amount of such payment.
C. PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER
LETTERS OF CREDIT.
(i) Payment by Lenders. In the event that Borrowers shall fail
for any reason to reimburse Issuing Lender as provided in subsection
3.3B in an amount equal to the amount of any payment by Issuing Lender
under a Letter of Credit issued by it, Issuing Lender shall promptly
notify Administrative Agent of the unreimbursed amount of such drawing
and upon receipt of such notice, Administrative Agent shall promptly
notify each Lender (other than Issuing Lender) of such unreimbursed
amount and of such Lender's respective participation therein based on
such Lender's Pro Rata Share; provided, that no Lender's funding of its
participation in any such drawing shall exceed its Pro Rata Share of
the amount of such drawing, and the aggregate principal amount of all
participations funded by a Lender with respect to Letters of Credit
shall in no event exceed the amount of such Lender's Letter of Credit
Commitment. Each Lender shall make available to Issuing Lender an
amount equal to its respective participation, in Dollars and in same
day funds, at the office of Issuing Lender specified in such notice,
not later than 12:00 Noon (Chicago time) on the first Business Day
(under the laws of the jurisdiction in which such office of Issuing
Lender is located) after the date notified by Administrative Agent. In
the event that any Lender fails to make available to Issuing Lender on
such Business Day the amount of such Lender's participation in such
Letter of Credit as provided in this subsection 3.3C, Issuing Lender
shall be entitled to recover such amount on demand from such Lender
together with interest thereon at the rate customarily used by Issuing
Lender for the correction of errors among banks for 3 Business Days and
thereafter at the Base Rate. Nothing in this subsection 3.3C shall be
deemed to prejudice the right of any Lender to recover from Issuing
Lender any amounts made available by such Lender to Issuing Lender
pursuant to this subsection 3.3C in the
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event that it is determined by the final judgment of a court of
competent jurisdiction that the payment with respect to a Letter of
Credit by Issuing Lender in respect of which payment was made by such
Lender constituted gross negligence or willful misconduct on the part
of Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From
Borrowers. In the event Issuing Lender shall have been reimbursed by
other Lenders pursuant to subsection 3.3C(i) for all or any portion of
any payment by Issuing Lender under a Letter of Credit issued by it,
Issuing Lender shall deliver to Administrative Agent for distribution
to any other Lender that has paid all amounts payable by it under
subsection 3.3C(i) with respect to such payment such other Lender's Pro
Rata Share of all payments subsequently received by Issuing Lender from
Borrowers in reimbursement of such payment under the Letter of Credit
when such payments are received. Any such distribution shall be made to
a Lender at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such
Lender may request.
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Borrowers. Borrowers agree to pay
to Issuing Lender, with respect to payments under any Letters of Credit
issued by it, interest on the amount paid by such Issuing Lender in
respect of each such payment from the date a drawing is honored to but
excluding the date such amount is reimbursed by Borrowers at a rate
equal to (1) for the period from the date such drawing is honored to
but excluding the Reimbursement Date, the Base Rate plus the Base Rate
Margin per annum and ---- (2) thereafter, a rate which is 2% per annum
in excess of the rate of interest set forth in the foregoing clause
(i)(1). Interest payable pursuant to this subsection 3.3D(i) shall be
computed on the basis of a 360-day year, for the actual number of days
elapsed in the period during which it accrues and shall be payable on
demand or, if no demand is made, on the date on which the related
drawing under a Letter of Credit is reimbursed in full. All payments by
Borrowers in respect of payments made by Issuing Lender under a Letter
of Credit issued by it shall include payment of accrued interest on the
principal amount being repaid or prepaid, and all such payments shall
be applied to the payment of interest before application to principal.
Payment or acceptance of the increased rates of interest provided for
in this subsection 3.3D is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Administrative
Agent or any Lender.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a payment under a Letter
of Credit issued by it, (a) such Issuing Lender shall distribute to
Administrative Agent for distribution to each other Lender, out of the
interest received by Issuing Lender in respect of the period from the
date such drawing is honored to but excluding the date on which Issuing
Lender is reimbursed for the amount of such payment, the amount that
such other Lender would
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have been entitled to receive in respect of the letter of credit fee
that would have been payable in respect of such Letter of Credit for
such period pursuant to subsection 3.2 if no drawing had been honored
under such Letter of Credit, and (b) in the event Issuing Lender shall
have been reimbursed by other Lenders pursuant to subsection 3.3C(i)
for all or any portion of such payment, Issuing Lender shall distribute
to Administrative Agent for distribution to each other Lender that has
paid all amounts payable by it under subsection 3.3C(i) with respect to
such payment such other Lender's Pro Rata Share of any interest
received by Issuing Lender in respect of that portion of such payment
so reimbursed by other Lenders for the period from the date on which
Issuing Lender was so reimbursed by other Lenders to but excluding the
date on which such portion of such payment is reimbursed by Borrowers.
Any such distribution shall be made to a Lender at its primary address
set forth below its name on the appropriate signature page hereof or at
such other address as such Lender may request.
3.4. OBLIGATIONS ABSOLUTE.
The obligation of Borrowers to reimburse Issuing Lender for
payments under the Letters of Credit issued by it and the obligations of Lenders
under subsection 3.3C(i) shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which any Borrower or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), Issuing Lender or other
Lender or any other Person or, in the case of a Lender, against any
Borrower, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
underlying transaction between any Borrower or one of its Subsidiaries
and the beneficiary for which any Letter of Credit was procured);
(iii) any draft or other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) payment by Issuing Lender under any Letter of Credit
against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries (including CPIH Subsidiaries);
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(vi) any breach of this Agreement or any other Credit Document
by any party thereto;
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event
of Default shall have occurred and be continuing;
provided, in each case, that payment by Issuing Lender under the applicable
Letter of Credit shall not have constituted gross negligence or willful
misconduct of Issuing Lender under the circumstances in question (as determined
by a final judgment of a court of competent jurisdiction).
3.5. NATURE OF ISSUING LENDER'S DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as provided
in subsection 2.7, Borrowers hereby jointly and severally agree to protect,
indemnify, pay and save harmless Issuing Lender from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable fees, expenses and disbursements of outside counsel and
allocated costs of internal counsel) which Issuing Lender may incur or be
subject to as a consequence, direct or indirect, of (i) the issuance of any
Letter of Credit by Issuing Lender, other than as a result of (a) the gross
negligence or willful misconduct of Issuing Lender as determined by a final
judgment of a court of competent jurisdiction or (b) subject to the following
clause (ii), the wrongful dishonor by Issuing Lender of a proper demand for
payment made under any Letter of Credit issued by it or (ii) the failure of
Issuing Lender to honor a drawing under any such Letter of Credit as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto Government Authority.
B. NATURE OF ISSUING LENDER'S DUTIES. As between Borrowers and
Issuing Lender, Borrowers assume all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of
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Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary
of any such Letter of Credit of the proceeds of any drawing under such Letter of
Credit; or (viii) any consequences arising from causes beyond the control of
Issuing Lender, including any act or omission by a Government Authority
specified in subsection 3.5A, and none of the above shall affect or impair, or
prevent the vesting of, any of Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this subsection 3.5B,
any action taken or omitted by Issuing Lender under or in connection with the
Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put Issuing Lender
under any resulting liability to any Borrower.
Notwithstanding anything to the contrary contained in this
subsection 3.5, Borrowers shall retain any and all rights they may have against
Issuing Lender for any liability arising solely out of the gross negligence or
willful misconduct of Issuing Lender, as determined by a final judgment of a
court of competent jurisdiction.
3.6. CASH COLLATERAL FOR LETTERS OF CREDIT.
A. RELEASES OF CASH COLLATERAL. If (i) (a) the underlying
Contractual Obligation to provide a Letter of Credit or a replacement thereto to
the beneficiary thereof has terminated (other than by drawing under such Letter
of Credit), and/or (b) the beneficiary of such Letter of Credit has otherwise
returned the same for cancellation without the expectation that a Letter of
Credit will be issued contemporaneously with such cancellation in substitution
for such cancelled Letter of Credit, and/or the maximum amount available for
drawing under a Letter of Credit is permanently reduced (other than such a
reduction concurrently with a reissuance or replacement of the relevant reduced
portion of a Closing Date Letter of Credit pursuant to subsection
3.1(B)(ii)(a)), and (ii) the Letter of Credit Commitments are permanently
reduced by the amount of such Letter of Credit or such reduction in the stated
amount of such Letter of Credit, as the case may be, then, to the extent that
the amount of cash collateral securing the Letter of Credit Exposure pursuant to
the Collateral Account Agreement exceeds 105% of the Letter of Credit
Commitments then in effect after such permanent reduction, the excess cash
collateral shall be applied to the payment to or upon the order of Borrowers or
to whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, except to the extent that the Intercreditor
Agreement requires application in a different manner than as set forth in this
subsection 3.6A.
B. CASH COLLATERAL ON THE MATURITY DATE. On the Maturity Date,
any outstanding Letter of Credit Exposure shall be cash collateralized in an
amount equal to 105% of the amount thereof by Borrowers or otherwise supported,
in either case in a manner satisfactory to the Lenders.
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SECTION 4. CONDITIONS
4.1. CONDITIONS TO CLOSING DATE.
The obligations of Lenders with respect to their respective
Commitments and to make any Revolving Loans to be made on the Closing Date, and
the issuance of any Letters of Credit to be issued on the Closing Date, are, in
addition to the conditions precedent specified in subsections 4.2 and 4.3 (as
applicable), subject to prior or concurrent satisfaction of the following
conditions:
A. CREDIT PARTY DOCUMENTS. On or before the Closing Date,
Borrowers shall, and shall cause each other Credit Party to, deliver to Lenders
(or to Administrative Agent with sufficient originally executed copies, where
appropriate, for each Lender) the following with respect to Borrowers or such
Credit Party, as the case may be, each, unless otherwise noted, dated the
Closing Date:
(i) Copies of the Organizational Documents of such Person,
certified by the Secretary of State of its jurisdiction of organization
or, if such document is of a type that may not be so certified,
certified by the secretary or similar officer of the applicable Credit
Party, together with a good standing certificate from the Secretary of
State of its jurisdiction of organization and each other state in which
such Person is qualified to do business and, to the extent generally
available, a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the
appropriate taxing authority of each of such jurisdictions, each dated
a recent date prior to the Closing Date;
(ii) Resolutions of the Governing Body of such Person
approving and authorizing the execution, delivery and performance of
the Credit Documents to which it is a party certified as of the Closing
Date by the secretary or similar officer of such Person as being in
full force and effect without modification or amendment;
(iii) Signature and incumbency certificates of the officers of
such Person executing the Credit Documents to which it is a party;
(iv) Executed originals of the Credit Documents to which such
Person is a party; and
(v) Such other documents as Administrative Agent may
reasonably request.
B. FEES. Borrowers shall have paid out of Debtors' estates to
Administrative Agent, for distribution (as appropriate) to Administrative Agent,
Issuing Lender and Lenders, any fees payable on the Closing Date referred to in
subsection 2.3 and all reasonable and documented costs and expenses (including
legal fees, due diligence fees, recordation expenses, other out-of-pocket
expenses and taxes) of Administrative Agent incurred in connection with the
negotiation, preparation, recordation, execution and
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completion of the Credit Documents and the transactions contemplated thereby,
including such fees and expenses of counsel to Administrative Agent.
C. CORPORATE AND CAPITAL STRUCTURE; MANAGEMENT; OWNERSHIP.
(i) Corporate Structure. DHC shall own all of the issued and
outstanding Capital Stock of Company. The corporate organizational
structure of Company and its Subsidiaries (including CPIH Subsidiaries)
on the Closing Date, after giving effect to the Plan of Reorganization,
shall be satisfactory to Requisite Lenders, shall be consistent in all
material respects with the Plan of Reorganization and the Disclosure
Statement related thereto.
(ii) Capital Structure and Ownership. DHC shall have made a
cash equity contribution to Company of not less than $30,000,000
(including cash equity contributed in connection with the "Lake
Transaction" (as defined in the DIP Credit Agreement)). The capital
structure and ownership of Company and its Subsidiaries (including CPIH
Subsidiaries) on the Closing Date, after giving effect to the Plan of
Reorganization, shall be satisfactory to Requisite Lenders, shall be
consistent in all material respects with the Plan of Reorganization and
the Disclosure Statement related thereto.
(iii) Management. The Governing Bodies, officers and
management structure of Company and its Subsidiaries (including CPIH
Subsidiaries) on the Closing Date, after giving effect to the Plan of
Reorganization, shall be satisfactory to Requisite Lenders, shall be
consistent in all material respects with the Plan of Reorganization and
the Disclosure Statement related thereto and shall be as set forth on
Schedule 4.1C annexed hereto. Lenders shall have received copies of,
and Requisite Lenders shall be satisfied with the form and substance
of, any employment agreements with and any incentive arrangements for
senior management of Company and its Subsidiaries.
D. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Company shall have delivered to Administrative Agent an Officer's Certificate,
in form and substance satisfactory to Administrative Agent, to the effect that
the representations and warranties in Section 5 are true, correct and complete
in all material respects on and as of the Closing Date to the same extent as
though made on and as of that date (or, to the extent such representations and
warranties specifically relate to an earlier date, that such representations and
warranties were true, correct and complete in all material respects on and as of
such earlier date) and that Borrowers shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before the Closing Date.
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E. PLAN OF REORGANIZATION; CONFIRMATION ORDER; DISCHARGE OF
EXISTING CREDIT FACILITIES.
(i) Plan of Reorganization. The Plan of Reorganization and all
amendments, modifications, revisions and restatements thereof, if any,
shall have been approved by the creditors of Borrowers (including the
DIP Lenders and the Prepetition Lenders) in requisite number and
percentage and confirmed by the Bankruptcy Court pursuant to the
Confirmation Order and delivered to Administrative Agent (the "APPROVED
PLAN OF REORGANIZATION"). Except as set forth in modifications filed
with the Bankruptcy Court and approved by Administrative Agent, there
shall have been no modifications, amendments, revisions or restatements
of the Approved Plan of Reorganization. Any representation and warranty
made by Company or any of its Subsidiaries in the Approved Plan of
Reorganization shall be accurate, true, correct and complete in all
material respects as of the Closing Date. The Approved Plan of
Reorganization (a) shall provide for the payments on the Closing Date
described in subsection 4.1T, the corporate reorganization described in
subsection 4.1S, and the making of Revolving Loans and the issuance of
the Letters of Credit under this Agreement and the Indebtedness
described in subsection 4.1F; and (b) upon satisfaction of all
conditions to the effectiveness of this Agreement, shall become
effective in accordance with its terms without waiver of any condition
to such effectiveness that, in Administrative Agent's reasonable
judgment, is material.
(ii) Confirmation Order. The Confirmation Order shall have
been delivered to Lenders, shall address the matters set forth in
subsections 4.1F, 4.1S and 4.1T, the issuance of the Letters of Credit
under this Agreement and the terms hereof and the granting of all Liens
and consents required under this Agreement and the other Credit
Documents and otherwise be in form and substance satisfactory to
Requisite Lenders. The Confirmation Order shall be in full force and
effect and no portion thereof shall have been stayed pending any appeal
or petition for review or for rehearing, and Administrative Agent shall
have received evidence satisfactory to each demonstrating such facts.
Debtors' Second Amended Joint Plan of Liquidation under Chapter 11 of
the Bankruptcy Code and the Liquidation Plan Supplement to Debtors'
Second Amended Joint Plan of Liquidation, as filed with the Bankruptcy
Court on December 18, 2003 and February 18, 2004, respectively, and as
amended, supplemented or otherwise modified from time to time
thereafter to the extent permitted under the DIP Credit Agreement,
shall have been confirmed by the Bankruptcy Court pursuant to an order
in form and substance satisfactory to Requisite Lenders.
(iii) Approval of Fees Related to Exit Financing. The
Bankruptcy Court order approving the fees payable to Administrative
Agent and the Lenders described in subsection 4.1B shall be in full
force and effect, without modification or amendment except to the
extent approved by Administrative Agent.
(iv) Material Agreements. The terms and conditions of any
Material Contracts to be entered into by the Borrowers or any of their
Subsidiaries pursuant
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to the Approved Plan of Reorganization shall be in form and substance
satisfactory to Requisite Lenders and Administrative Agent.
F. MATTERS RELATING TO EXISTING INDEBTEDNESS.
(i) Termination of DIP Credit Agreement and Related Liens. (a)
Indebtedness consisting of funded amounts outstanding under the DIP
Credit Agreement on the Closing Date shall have been repaid in full in
cash, (b) all undrawn DIP Tranche A L/Cs and DIP Tranche B L/Cs (other
than the Existing Detroit L/Cs) shall be replaced (or any further
drawings thereunder shall be fully supported) with letters of credit
issued under this Agreement, (c) the Existing Detroit L/Cs shall be
replaced with Letters of Credit issued under the Detroit L/C Facility
Agreement, (d) each letter of credit (if any) issued or deemed issued
under the DIP Credit Agreement other than the DIP Tranche A L/Cs and
DIP Tranche B L/Cs shall have been cash collateralized pursuant to
arrangements reasonably satisfactory to the issuer of such letter of
credit, or cancelled and returned undrawn, or reimbursed, (e) all
commitments to lend or make other extensions of credit under the DIP
Credit Agreement shall have terminated (except that the participations
of DIP Lenders purchased in the letters of credit, if any, referred to
in clause (d) above shall continue), and (f) all documents or
instruments necessary to release all Liens securing Indebtedness or
other obligations of Borrowers and their Subsidiaries (including CPIH
Subsidiaries) under the DIP Credit Agreement shall have been delivered
to Administrative Agent to the extent required by Administrative Agent.
(ii) Termination of Prepetition Credit Agreement, 9.25%
Debentures and Related Liens. (a) Indebtedness consisting of the 9.25%
Debentures and the Prepetition Obligations on the Closing Date shall be
satisfied by application of the High Yield Notes and the CPIH Term
Loans and by application of Cash On Hand of Borrowers (as described in
subsection 4.1T), and (b) all documents or instruments necessary to
release all Liens securing Indebtedness or other obligations of
Borrowers and their Subsidiaries (including CPIH Subsidiaries) under
the Prepetition Credit Agreement and the 9.25% Debentures shall have
been delivered to Administrative Agent to the extent required by the
Administrative Agent.
(iii) CPIH Facilities. Indebtedness under the CPIH Revolver
Agreement and Indebtedness under the CPIH Term Loan Agreement shall be
secured as set forth in the CPIH Revolver Documents and the CPIH Term
Loan Documents and shall be non-recourse to the Borrowers or their
assets other than pursuant to the CPIH Stock Pledge Agreement. The CPIH
Revolver Documents and the CPIH Term Loan Documents shall be in full
force and effect, the "Closing Date" as defined in each of the CPIH
Revolver Documents and the CPIH Term Loan Documents shall have
occurred, and the CPIH Revolver Documents and the CPIH Term Loan
Documents shall provide for $10,000,000 in revolving loan commitments
and $90,000,000 in term loans (subject to increase to up to $95,000,000
pursuant to and in accordance with the Approved Plan of
Reorganization), respectively, and shall otherwise be in form and
substance satisfactory to Requisite Lenders.
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(iv) Existing Indebtedness to Remain Outstanding. After giving
effect to the Approved Plan of Reorganization, the Indebtedness and
Contingent Obligations of Borrowers (other than Indebtedness under the
Credit Documents) shall consist of (a) the Detroit L/C Facility
Documents, which shall provide for maximum aggregate commitments of
$138,191,554.19 for the issuance of letters of credit to be issued on
the Closing Date to replace the Existing Detroit L/Cs and for other
specified uses, shall have a final maturity date of 5 years from the
Closing Date, shall provide for fees on undrawn outstanding letters of
credit at a rate no greater than 2.50% per annum, and upfront fees not
greater than 1.0% of the entire amount of letter of credit commitments,
and shall be secured by a senior Lien on the Collateral, (b)
$205,000,000 in aggregate initial principal amount of High Yield Notes,
(c) a note issued by Company in a principal amount not to exceed
$35,000,000 (the "TAX NOTE"), representing the back tax liability of
Company and its Subsidiaries as of the Closing Date, which Tax Note
shall be unsecured and unguarantied, shall have a final maturity date
of 6 years from the Closing Date, shall bear interest payable in
arrears at a rate no greater than 7.5% per annum, and shall amortize on
a 30-year schedule for the first 5 years after the issuance thereof
with the balance due at maturity, (d) "Class 6 Unsecured Notes" (as
defined in the Approved Plan of Reorganization) in the aggregate
principal amount of $4,000,000 and subordinated notes issued by Company
(the "UNSECURED CREDITOR NOTES") in an aggregate principal amount equal
to the amount of "Operating Company Unsecured Claims" that are
"Allowed" (as such terms are defined in the Approved Plan of
Reorganization), which Unsecured Creditor Notes shall be unsecured and
unguarantied, shall have a final maturity date of 8 years from the
Closing Date, shall bear interest payable in arrears at a rate no
greater than 7.5% per annum, and shall amortize in an amount not to
exceed $3,900,000 annually commencing on the second anniversary of the
Closing Date with the remainder due at final maturity, (e) outstanding
Indebtedness described in Schedule 7.1(vi) and Schedule 7.1(ix)
---------------- ---------------- annexed hereto, and (f) Indebtedness
and Contingent Obligations under the CPIH Stock Pledge Agreement, and
outstanding Contingent Obligations described in Schedule 7.4(iv) and
Schedule 7.4(vi) annexed ---------------- ---------------- hereto. The
terms and conditions of all such Indebtedness and Contingent
Obligations (including payment terms, covenants, representations and
warranties, defaults and, in the case of the Unsecured Notes, payment
subordination provisions), and the definitive documentation therefor,
shall be in form and in substance satisfactory to Requisite Lenders.
(v) Related Agreements in Full Force and Effect. Lenders shall
have received a fully executed or conformed copy of the Detroit L/C
Facility Documents, the CPIH Revolver Documents, the CPIH Term Loan
Documents, the CPIH Stock Pledge Agreement, the High Yield Indenture
and the High Yield Notes, the Tax Note, the Unsecured Creditor Notes,
the Unsecured Creditor Notes Indenture, the Intercreditor Agreement and
any documents executed in connection therewith, each such Related
Agreement, the Unsecured Creditor Notes, the CPIH Term Loan Documents,
the CPIH Revolver Documents, the Intercreditor Agreement and the
Unsecured Creditor Notes Indenture shall be in full force and effect
and no provision
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thereof shall have been modified or waived in any respect determined by
Administrative Agent to be material.
G. FINANCIAL STATEMENTS; PROJECTIONS. On or before the Closing
Date, Lenders shall have received the unaudited consolidated financial
statements of Company and its Subsidiaries for the Fiscal Quarters ended June
30, 2003 and September 30, 2003, all in reasonable detail and certified by the
chief executive officer or chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company and its
Subsidiaries as of the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments. Company shall have delivered to
Administrative Agent and Lenders such projected financial statements as
Administrative Agent may reasonably request for the period from the Closing Date
through December 31, 2008, including the budget of monthly and quarterly cash
receipts and expenditures for Fiscal Year 2004 and annual net cash flow for
Fiscal Years 2005, 2006, 2007 and 2008 attached hereto as Schedule 1.1C, which
budget and other projections shall be satisfactory to Administrative Agent and
Requisite Lenders and shall be accompanied by a certificate from the chief
executive officer or chief financial officer of Company certifying that they are
based upon good faith estimates and assumptions believed by Company to be
reasonable at the time made.
H. SOLVENCY ASSURANCES. On the Closing Date, Administrative
Agent and Lenders shall have received an Officer's Certificate dated the Closing
Date, substantially in the form of Exhibit IX annexed hereto and with
appropriate attachments, demonstrating that, after giving effect to the
consummation of the transactions contemplated by the Credit Documents,
Borrowers, taken as a whole, and Company will be Solvent.
I. OPINIONS OF COUNSEL TO CREDIT PARTIES. Lenders shall have
received originally executed copies of one or more favorable written opinions of
Cleary, Gottlieb, Steen & Hamilton, LeBoeuf, Lamb, Greene & McRae, Morris,
James, Hitchens & Williams LLP and Nixon Peabody LLP, counsel for Borrowers, and
of Skadden, Arps, Slate, Meagher & Flom LLP and affiliates, counsel for DHC, in
form and substance reasonably satisfactory to Administrative Agent and its
counsel, dated as of the Closing Date and setting forth substantially the
matters in the opinions designated in Exhibit X annexed hereto and as to such
other matters as Administrative Agent acting on behalf of Lenders may reasonably
request (this Agreement constituting a written request by Borrowers to such
counsel to deliver such opinions to Administrative Agent and Lenders).
J. OPINIONS OF COUNSEL DELIVERED UNDER RELATED AGREEMENTS AND
OTHER DOCUMENTS. Administrative Agent and its counsel shall have received copies
of the opinions of counsel delivered to the parties under the Related
Agreements, the CPIH Revolver Documents, the CPIH Term Loan Documents, the
Unsecured Creditor Notes and the Unsecured Creditor Notes Indenture, and
Borrowers shall have made reasonable efforts to obtain from each such counsel
letters authorizing Lenders to rely on such opinions to the same extent as
though such opinions were addressed to Lenders.
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K. EVIDENCE OF INSURANCE. Administrative Agent shall have
received a certificate from Company's insurance broker or other evidence
satisfactory to it that all insurance required to be maintained pursuant to
subsection 6.4 is in full force and effect and that Collateral Agent and/or
Administrative Agent on behalf of Lenders has been named as additional insured
and/or loss payee thereunder to the extent required under subsection 6.4.
L. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS.
Borrowers shall have obtained all Governmental Authorizations and all consents
of other Persons, in each case that are necessary or advisable in connection
with the transactions contemplated by the Credit Documents and the continued
operation of the business conducted by Company and its Subsidiaries in
substantially the same manner as conducted prior to the Closing Date. Each such
Governmental Authorization or consent shall be in full force and effect, except
in a case where the failure to obtain or maintain a Governmental Authorization
or consent, either individually or in the aggregate, should not reasonably be
expected to have a Material Adverse Effect. Administrative Agent shall have
received an Officer's Certificate of Company in form and substance reasonably
satisfactory to Administrative Agent certifying as to the foregoing matters and
any other evidence reasonably requested by Administrative Agent in support
thereof. All applicable waiting periods shall have expired without any action
being taken or threatened by any competent authority that would restrain,
prevent or otherwise impose adverse conditions on the transactions contemplated
by the Credit Documents or the financing thereof. No action, request for stay,
petition for review or rehearing, reconsideration, or appeal with respect to any
of the foregoing shall be pending, and the time for any applicable Government
Authority to take action to set aside its consent on its own motion shall have
expired.
M. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. To the
extent not otherwise satisfied pursuant to subsection 4.1N, Administrative Agent
shall have received evidence satisfactory to it that Credit Parties (except as
otherwise contemplated in subsection 5.18 hereof) shall have taken or caused to
be taken all such actions, executed and delivered or caused to be executed and
delivered all such agreements, documents and instruments, and made or caused to
be made all such filings and recordings (other than the filing or recording of
items described in clauses (ii) and (iii) below) that Administrative Agent may
reasonably request in order to evidence, in favor of Collateral Agent, for the
benefit of Secured Parties, a valid and perfected security interest in the
entire personal and mixed property Collateral, with the priority set forth in
the Collateral Documents (it being understood that such actions by DHC shall
relate solely to its pledge of the Capital Stock of Company). Such actions shall
include the following:
(i) Stock Certificates and Instruments. Delivery to Collateral
Agent of (a) certificates (which certificates shall be accompanied by
irrevocable undated stock powers, duly endorsed in blank and otherwise
satisfactory in form and substance to Collateral Agent) representing
all capital stock included in the Collateral and (b) all promissory
notes or other instruments (duly endorsed, where appropriate, in a
manner satisfactory to Collateral Agent) evidencing any Collateral;
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(ii) Lien Searches and UCC Termination Statements. Delivery to
Collateral Agent of (a) the results of a recent search, by a Person
satisfactory to Collateral Agent, of all effective UCC financing
statements and fixture filings and all judgment and tax lien filings
which may have been made with respect to any personal or mixed property
of any Borrower and of all effective UCC financing statements which may
have been made with respect to Capital Stock of Borrowers or any
Subsidiaries of any Borrower, in each case together with copies of all
such filings disclosed by such search, and (b) UCC termination
statements duly executed by all applicable Persons for filing in all
applicable jurisdictions as may be necessary to terminate any effective
UCC financing statements or fixture filings disclosed in such search
(other than any such financing statements or fixture filings in respect
of Liens permitted to remain outstanding pursuant to the terms of this
Agreement);
(iii) UCC Financing Statements and Fixture Filings. Delivery
to Collateral Agent of UCC financing statements and, where appropriate,
fixture filings, duly executed by each applicable Borrower with respect
to all personal and mixed property Collateral of such Borrower and by
DHC with respect to the Capital Stock of Company, in each case for
filing in all jurisdictions as may be necessary or in the opinion of
Collateral Agent desirable to perfect the security interests in favor
of Collateral Agent created in such Collateral pursuant to the
Collateral Documents;
(iv) PTO Cover Sheets, Etc. Delivery to Collateral Agent of
all cover sheets or other documents or instruments Collateral Agent may
reasonably request to be filed with the PTO in order to evidence Liens
in favor of Collateral Agent in respect of any IP Collateral; and
(v) Control Agreements. Delivery to Collateral Agent of such
Control Agreements with financial institutions and other Persons in
order to perfect Liens in respect of Deposit Accounts, Securities
Accounts and other Collateral pursuant to the Collateral Documents;
(vi) Certificate. Delivery to Administrative Agent and
Collateral Agent of an Officer's Certificate certifying that, as of the
Closing Date, the foreign patent registrations held by Company and its
Subsidiaries are not, individually or in the aggregate, material to the
business of Company and its Subsidiaries as a whole.
N. CLOSING DATE MORTGAGES; CLOSING DATE MORTGAGE POLICIES;
ETC. Collateral Agent shall have received from each applicable Borrower:
(i) Closing Date Mortgages. Fully executed and notarized
Mortgages (each a "CLOSING DATE MORTGAGE" and, collectively, the
"CLOSING DATE MORTGAGES"), in proper form for recording in all
appropriate places in all applicable jurisdictions, encumbering each
Real Property Asset listed in Schedule 4.1N annexed hereto (each a
"CLOSING DATE MORTGAGED PROPERTY" and, collectively, the "CLOSING DATE
MORTGAGED PROPERTIES" (it being understood and agreed that (a) no
Leasehold Property that is not a Material Leasehold Property shall be
required to be a Closing
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Date Mortgaged Property, and (b) no Real Property Asset the pledge of
which would constitute a material violation of (1) a valid and
enforceable Contractual Obligation in favor of or for the benefit of a
Person other than Company or any of its Subsidiaries and their
respective Affiliates for which the required consents have not been
obtained or (2) applicable law affecting the Borrower holding such Real
Property Asset, shall be required to be a Closing Date Mortgaged
Property));
(ii) Opinions of Local Counsel. An opinion of counsel (which
counsel shall be reasonably satisfactory to Administrative Agent) in
each state in which a Closing Date Mortgaged Property is located with
respect to the enforceability of the form(s) of Closing Date Mortgages
to be recorded in such state and such other matters as Administrative
Agent may reasonably request, in each case in form and substance
reasonably satisfactory to Administrative Agent;
(iii) Landlord Consents and Estoppels; Recorded Leasehold
Interests. In the case of each Closing Date Mortgaged Property
consisting of a Leasehold Property, (a) a Landlord Consent and Estoppel
with respect thereto, and (b) evidence that such Leasehold Property is
a Recorded Leasehold Interest;
(iv) Title Insurance. (a) ALTA mortgagee title insurance
policies or unconditional commitments therefor (the "CLOSING DATE
MORTGAGE POLICIES") issued by the Title Company with respect to the
Closing Date Mortgaged Properties listed in Part A of Schedule 4.1N
annexed hereto, in amounts not less than the respective amounts
designated therein with respect to any particular Closing Date
Mortgaged Properties, insuring fee simple title to, or a valid
leasehold interest in, each such Closing Date Mortgaged Property vested
in such Borrower and assuring Collateral Agent that the applicable
Closing Date Mortgages create valid and enforceable First Priority
mortgage Liens on the respective Closing Date Mortgaged Properties
encumbered thereby, subject only to a standard survey exception, which
Closing Date Mortgage Policies (1) shall include an endorsement for
mechanics' liens, for future advances under this Agreement and for any
other matters reasonably requested by Collateral Agent and (2) shall
provide for affirmative insurance and such reinsurance as Collateral
Agent may reasonably request, all of the foregoing in form and
substance reasonably satisfactory to Collateral Agent; and (b) evidence
satisfactory to Collateral Agent that such Borrower has (i) delivered
to the Title Company all certificates and affidavits required by the
Title Company in connection with the issuance of the Closing Date
Mortgage Policies and (ii) paid to the Title Company or to the
appropriate governmental authorities all expenses and premiums of the
Title Company in connection with the issuance of the Closing Date
Mortgage Policies and all recording and stamp taxes (including mortgage
recording and intangible taxes) payable in connection with recording
the Closing Date Mortgages in the appropriate real estate records;
(v) Title Reports. With respect to each Closing Date Mortgaged
Property listed in Part B of Schedule 4.1N annexed hereto, a title
report issued by the Title
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Company with respect thereto, dated not more than 30 days prior to the
Closing Date and satisfactory in form and substance to Administrative
Agent;
(vi) Copies of Documents Relating to Title Exceptions. Copies
of all recorded documents listed as exceptions to title or otherwise
referred to in the Closing Date Mortgage Policies or in the title
reports delivered pursuant to subsection 4.1N(iv); and
(vii) Matters Relating to Flood Hazard Properties. (a)
Evidence, which may be in the form of a letter from an insurance broker
or a municipal engineer, as to whether (1) any Closing Date Mortgaged
Property is a Flood Hazard Property and (2) the community in which any
such Flood Hazard Property is located is participating in the National
Flood Insurance Program, (b) if there are any such Flood Hazard
Properties, such Borrower's written acknowledgement of receipt of
written notification from Administrative Agent (1) as to the existence
of each such Flood Hazard Property and (2) as to whether the community
in which each such Flood Hazard Property is located is participating in
the National Flood Insurance Program, and (c) in the event any such
Flood Hazard Property is located in a community that participates in
the National Flood Insurance Program, evidence that Company has
obtained flood insurance in respect of such Flood Hazard Property to
the extent required under the applicable regulations of the Board of
Governors of the Federal Reserve System.
O. [INTENTIONALLY OMITTED].
P. CASH MANAGEMENT SYSTEM. The cash management system of
Company and its Subsidiaries shall be as set forth on Schedule 4.1P annexed
hereto.
Q. [INTENTIONALLY OMITTED].
R. GEOTHERMAL SALE. Company shall have consummated the
Geothermal Sale on terms and conditions and pursuant to documentation in form
and substance satisfactory to the Requisite DIP Lenders.
S. CPIH REORGANIZATION. On the Closing Date, (i) Company shall
own directly or indirectly 100% of the outstanding Capital Stock of CEA, (ii)
CEA shall own 100% of the outstanding common stock of CPIH, which shall own the
Capital Stock of all Persons (including Persons holding the equity interests in
other Persons) holding the assets and operations of the IPP International
Business to the extent described in the Approved Plan of Reorganization and the
Disclosure Statement related thereto, (iii) all relevant operating and
administrative expenses associated with the IPP International Business shall be
transferred into CPIH in accordance with the Management Services and
Reimbursement Agreement, and (iv) not less than $5,000,000 of cash for working
capital shall have been transferred from Company and its Subsidiaries to the
CPIH Borrowers as an equity contribution.
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T. DISTRIBUTION. All unrestricted Cash On Hand (including,
without limitation, net sale proceeds from the Geothermal Sale) of Borrowers
remaining prior to the equity contribution referred to in subsection 4.1C(ii)
but after (i) the transfer of working capital amounts to CPIH as described in
subsection 4.1S, (ii) the payment of the fees referred to in subsection 4.1B,
(iii) the disposition of those letters of credit referred to in subsection
4.1F(i)(d), (iv) the payment of allowed administrative expenses, (v) the
reimbursement of reasonable accrued fees and expenses of DHC not to exceed
$4,000,000 in the aggregate and reasonable accrued fees and expenses of D.E.
Shaw not to exceed $350,000 in the aggregate, and (vi) the payment of funded
outstanding obligations under the DIP Credit Agreement (if any) and (without
duplication of clauses (i) through (vi)) the payment of other "Exit Costs" (as
defined in the Approved Reorganization Plan), subject to an amount of cash
(which amount shall be determined in accordance with the terms set forth in the
draft Plan of Reorganization attached (on the date of execution thereof) to the
Investment and Purchase Agreement dated as of December 2, 2003 between DHC and
Company) to be retained in the domestic Cash Management System by Company and
its Subsidiaries (collectively, such Cash On Hand, net of such transferred
amount, such payments and reimbursements, such retained amount and such
reserves, is referred to herein as "DISTRIBUTABLE CASH"), shall have been
distributed as follows: first, to the extent of the first $60,000,000 of such
Distributable Cash, for the benefit of the holders of Prepetition Secured Claims
that are Lenders on the Closing Date, on account of their allowed pre-petition
exposure, in accordance with the Approved Plan of Reorganization, second, to the
extent of the next $7,200,000 of such Distributable Cash, for the benefit of
those holders of Prepetition Secured Claims that are not Lenders on the Closing
Date, on account of any remaining allowed pre-Petition Date exposure, in
accordance with the Approved Plan of Reorganization, and third, to the extent of
25% of any remaining Distributable Cash, to Company (the amount of Distributable
Cash so distributed to Company being referred to herein as the "CLOSING DATE
RETAINED AMOUNT"), and to the extent of the remaining 75%, for the benefit of
the holders of Prepetition Secured Claims, on account of any remaining allowed
pre-Petition Date exposure, in accordance with the Approved Plan of
Reorganization.
U. NOL AVAILABILITY. Company, its independent advisers,
Administrative Agent and Administrative Agent's counsel shall have determined to
their respective sole satisfaction that the net operating losses disclosed to
Administrative Agent and Lenders prior to the Closing Date as being held by DHC
are available and accessible to Company and its Subsidiaries.
V. LITIGATION. On the Closing Date, there shall be no action,
suit, investigation, litigation or proceeding pending or threatened in any court
or before any arbitrator or governmental instrumentality that purports to affect
the Approved Plan of Reorganization, any of the Credit Documents or any of the
CPIH Term Loan Documents that could reasonably be expected to have a Material
Adverse Effect or a material adverse effect on the Approved Plan of
Reorganization, any of the Credit Documents or any of the CPIH Term Loan
Documents.
W. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent,
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acting on behalf of Lenders, and their counsel shall be satisfactory in form and
substance to Administrative Agent and such counsel, and Administrative Agent and
such counsel shall have received all such counterpart originals or certified
copies of such documents as Administrative Agent may reasonably request.
Each Lender, by delivering to Administrative Agent a signed
counterpart to this Agreement, shall be deemed (unless such Lender indicates
otherwise in writing to Administrative Agent and Company) to have acknowledged
receipt of, and to have consented to, approved and be satisfied with, the
documents, agreements, instruments or information which require approval,
consent or satisfaction of the Lenders or Requisite Lenders, as applicable, in
order for the conditions precedent contained in this subsection 4.1 to be
satisfied.
Notwithstanding anything in this Section 4 to the contrary, it
is understood and agreed that the conditions of subsection 4.1A(i) shall be
deemed satisfied notwithstanding (i) failure to deliver all of the certificates
or other evidence of good standing described in subsection 4.1A(i), (a) so long
as Administrative Agent is notified which certificates or other evidence shall
not have been delivered and, in its sole discretion, agrees that such
certificates or other evidence may be delivered with respect to the relevant
Persons after the Closing Date and (b) it being agreed and understood that
failure to deliver all of the certificates or other evidence of good standing
described in subsection 4.1A(i) on or prior to the date which is 90 days after
the Closing Date shall constitute an immediate Event of Default on such date
(unless such failure is due to failure to pay franchise taxes full payment of
which has been tendered by such date), or (ii) failure to deliver all or any
portion of the title insurance-related documents and instruments described in
subsection 4.1N with respect to the Real Property Asset located in Lassen
County, California, provided, that failure to deliver all of such documents and
instruments with respect to such property on or prior to the date which is 360
days after the Closing Date shall constitute an immediate Event of Default on
such date.
4.2. CONDITIONS TO ALL REVOLVING LOANS.
The obligations of Lenders to make Revolving Loans on each
Funding Date are subject to the following further conditions precedent:
A. Administrative Agent shall have received before that
Funding Date, in accordance with the provisions of subsection 2.1B, an
originally executed Notice of Borrowing, in each case signed by a duly
authorized Officer of Borrowers.
B. As of that Funding Date:
(i) The representations and warranties contained herein
(except, as of the Closing Date only, the representation and warranty
set forth in the first sentence of Section 5.4 hereof) and in the other
Credit Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though
made on and as of that date, except to the extent such representations
and
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warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and
complete in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iii) No unstayed order, judgment or decree of any arbitrator
or Government Authority (including the Bankruptcy Court) shall enjoin
or restrain any Lender from making the Revolving Loans to be made by it
on that Funding Date; and
(iv) After giving effect to the proposed borrowing, (1) the
aggregate principal amount of all outstanding Revolving Loans shall not
exceed the Revolving Loan Commitments then in effect and (2) the
aggregate Credit Utilization then in effect shall not exceed the
aggregate Letter of Credit Commitments then in effect.
4.3. CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder is subject to
the following conditions precedent:
A. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B, an originally executed Request for Issuance (or a facsimile
copy thereof), in each case signed by a duly authorized Officer of Borrowers,
together with all other information specified in subsection 3.1B and such other
documents or information as Issuing Lender may reasonably require in connection
with the issuance of such Letter of Credit.
B. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.2B (other than subdivision (iv)
thereof) shall be satisfied to the same extent as if the issuance of such Letter
of Credit were the making of a Revolving Loan and the date of issuance of such
Letter of Credit were a Funding Date.
C. As of the date of issuance of such Letter of Credit, after
giving effect to the proposed issuance of such Letter of Credit, the aggregate
Credit Utilization then in effect shall not exceed the aggregate Letter of
Credit Commitments then in effect.
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make the Revolving Loans, to induce Issuing Lender to issue Letters of Credit
and to induce Lenders to purchase participations therein, Company represents and
warrants to each Lender, on the date of this Agreement, on the Closing Date, on
each Funding Date and on the date of issuance of each Letter of Credit, that the
following statements are true, correct and complete:
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5.1. ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS
AND SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Credit Party is a
corporation, partnership, trust or limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization as specified in Schedule 5.1 annexed hereto (provided, however,
that failure of any Credit Party to be in good standing in the relevant
jurisdiction shall not be deemed a breach of this representation if (x) such
failure is due solely to failure to pay franchise taxes and (y) full payment of
such franchise taxes has been tendered no later than the date which is 90 days
after the Closing Date). Each Credit Party has all requisite power and authority
to own and operate its properties, to carry on its business as now conducted and
as proposed to be conducted, to enter into the Credit Documents to which it is a
party and to carry out the transactions contemplated thereby. Each Credit Party
is in compliance with all material terms of its Organizational Documents.
B. QUALIFICATION AND GOOD STANDING. Each Credit Party is
qualified to do business and in good standing in every jurisdiction necessary to
carry out its business and operations, except in jurisdictions where the failure
to be so qualified or in good standing has not had and could not reasonably be
expected to have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Company and its Subsidiaries are
engaged only in the businesses permitted to be engaged in pursuant to subsection
7.11.
D. SUBSIDIARIES. All of the Subsidiaries of Company as of the
Closing Date and their jurisdictions of organization are identified in Schedule
5.1 annexed hereto. The Capital Stock of each of the Subsidiaries of Company
identified in Schedule 5.1 annexed hereto is duly authorized, validly issued,
fully paid and nonassessable and none of such Capital Stock constitutes Margin
Stock. Each of the Subsidiaries of Company identified in Schedule 5.1 annexed
hereto is a corporation, partnership, trust or limited liability company duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of organization set forth therein, has all requisite
power and authority to own and operate its properties and to carry on its
business as now conducted and as proposed to be conducted, and is qualified to
do business and in good standing in every jurisdiction necessary to carry out
its business and operations, in each case except where failure to be so
qualified or in good standing or a lack of such power and authority has not had
and could not reasonably be expected to have a Material Adverse Effect. Schedule
5.1 annexed hereto correctly sets forth, as of the Closing Date, the ownership
interest of Company and each of its Subsidiaries in each of the Subsidiaries of
Company identified therein.
5.2. AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Credit Documents have been duly authorized by all necessary
action on the part of each Credit Party that is a party thereto.
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B. NO CONFLICT. The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to Company or any of its Subsidiaries, the Organizational
Documents of Company or any of its Subsidiaries or any order, judgment or decree
of any court or other Government Authority binding on Company or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
Company or any of its Subsidiaries, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Company or any of
its Subsidiaries, other than any Liens created under any of the Credit Documents
in favor of Collateral Agent on behalf of Secured Parties, or (iv) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of Company or any of its Subsidiaries, except for (x)
such approvals or consents which will be obtained on or before the Closing Date
and disclosed in writing to Lenders.
C. GOVERNMENTAL CONSENTS. The execution, delivery and
performance by Credit Parties of the Credit Documents to which they are parties
and the consummation of the transactions contemplated by the Credit Documents do
not and will not require any Governmental Authorization, except for the entry of
the Confirmation Order and except for filings expressly contemplated by the
Credit Documents and those Governmental Authorizations which have been obtained.
D. BINDING OBLIGATION. Each of the Credit Documents has been
duly executed and delivered by each Credit Party that is a party thereto and is
the legally valid and binding obligation of such Credit Party, enforceable
against such Credit Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
E. RESTRICTIONS ON TRANSFER. There are no restrictions on any
Borrower or any of its Subsidiaries which prohibit or otherwise restrict the
transfer of cash or other assets from one to another, other than (i)
prohibitions or restrictions existing under or by reason of (a) this Agreement
and the other Credit Documents, (b) applicable law, (c) customary non-assignment
provisions entered into in the ordinary course of business and consistent with
past practices, and (d) any documents or instruments governing the terms of any
Indebtedness or other obligations secured by Liens permitted by subsection 7.2A,
provided, that such prohibitions or restrictions apply only to the assets
subject to such Liens, and (ii) restrictions described in clauses (a) through
(d) of subsection 7.2D.
5.3. FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders'
request, (i) the audited consolidated financial statements of Company and its
Subsidiaries for the Fiscal Year ended December 31, 2002 and (ii) the unaudited
consolidated financial statements of Company and its Subsidiaries for the Fiscal
Quarters ended March 31, 2003, June 30, 2003
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and September 30, 2003. All such statements were prepared in conformity with
GAAP and fairly present, in all material respects, the financial position (on a
consolidated and, where applicable, consolidating basis) of the entities
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows (on a consolidated and, where
applicable, consolidating basis) of the entities described therein for each of
the periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments. No
Borrower has, as of the Closing Date, any Contingent Obligation, contingent
liability or unusual long-term commitment that is not reflected in the foregoing
financial statements or the notes thereto and, as of any Funding Date subsequent
to the Closing Date, is not reflected in the most recent financial statements
delivered to Lenders pursuant to subsection 6.1 or the notes thereto (other than
(a) those liabilities reflected on the Schedules to this Agreement and (b)
Performance Guaranties and Contingent Obligations that are permitted to be
incurred under subsection 7.4) and that, in any such case, is material in
relation to the business, operations, properties, assets or financial condition
of Company or any of its Subsidiaries taken as a whole.
5.4. NO MATERIAL ADVERSE CHANGE; NO RESTRICTED PAYMENTS.
Since December 31, 2002, no event or change has occurred
(other than as disclosed in reports delivered pursuant to subsection 6.1(i) of
the DIP Credit Agreement) that has resulted in or evidences, either in any case
or in the aggregate, a Material Adverse Effect. Since the Petition Date, neither
Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Payment or agreed to do so except (i) as permitted by subsection 7.5, and (ii)
as was permitted by subsection 7.5 of the DIP Credit Agreement.
5.5. TITLE TO PROPERTIES; LIENS; REAL PROPERTY; INTELLECTUAL
PROPERTY.
A. TITLE TO PROPERTIES; LIENS. Company and its Subsidiaries
have (i) good, sufficient and legal title to (in the case of fee interests in
real property), (ii) valid leasehold interests in (in the case of leasehold
interests in real or personal property), or (iii) good title to (in the case of
all other personal property), all of their respective material properties and
assets reflected in the financial statements referred to in subsection 5.3 or in
the most recent financial statements delivered pursuant to subsection 6.1, in
each case except for assets disposed of since the date of such financial
statements in the ordinary course of business or as otherwise permitted under
subsection 7.7. Except as permitted by this Agreement, all such properties and
assets are free and clear of Liens.
B. REAL PROPERTY. As of the Closing Date, Schedule 5.5B
annexed hereto contains a true, accurate and complete list of (i) all fee
interests in any Real Property Assets and (ii) all leases, subleases or
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting each Real Property Asset,
regardless of whether a Borrower is the landlord or tenant (whether directly or
as an assignee or successor in interest) under such lease, sublease or
assignment. As of the Closing Date, except as specified in Schedule 5.5B annexed
hereto, each agreement listed
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in clause (ii) of the immediately preceding sentence is in full force and effect
and no Borrower has knowledge of any material default that has occurred and is
continuing thereunder, and each such agreement constitutes the legally valid and
binding obligation of each applicable Borrower, enforceable against such
Borrower in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles.
C. INTELLECTUAL PROPERTY. As of the Closing Date, Schedule
5.5C annexed hereto contains a true, accurate and complete list of all material
Intellectual Property. Each of Company and its Subsidiaries owns or has the
right to use all material Intellectual Property used in the conduct of its
business, and none of such Intellectual Property conflicts with a right of any
other Person to the extent such conflict could reasonably be expect to result in
a Material Adverse Effect.
5.6. LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 5.6 annexed hereto, there are
no Proceedings (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, or before or by any court or other Government
Authority (including any Environmental Claims) that are pending or, to the
knowledge of any Borrower, threatened against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries and that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither Company nor any of its Subsidiaries (i) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate (together with all such Proceedings with
respect to substantially similar or related matters), would reasonably be
expected to result in a Material Adverse Effect, or (ii) is subject to or in
default with respect to any final judgments, writs, injunctions, decrees, rules
or regulations of any court or other Government Authority that, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect.
5.7. PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all material
tax returns and reports of Company and its Subsidiaries required to be filed by
any of them have been timely filed, and all taxes shown on such tax returns to
be due and payable (other than taxes represented by the Tax Note) and all
assessments, fees and other governmental charges upon Company and its
Subsidiaries and upon their respective properties, assets, income, businesses
and franchises that are due and payable have been paid when due and payable. No
Borrower knows of any proposed tax assessment against Company or any of its
Subsidiaries, that Company or its Subsidiaries dispute or disagree with, that is
not being actively contested by Company or such Subsidiary in good faith and by
appropriate proceedings; provided, that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
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5.8. PERFORMANCE OF AGREEMENTS; MATERIAL CONTRACTS.
A. Except as set forth on Schedule 5.8A annexed hereto, after
giving effect to the Approved Plan of Reorganization, neither Company nor any of
its Subsidiaries is in default in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any of its
Contractual Obligations, and no condition exists that, with the giving of notice
or the lapse of time or both, would constitute such a default except where the
consequences, direct or indirect, of such default or defaults, if any, could not
reasonably be expected to have a Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a party to
or is otherwise subject to (i) any agreements or instruments the performance of
which, in the ordinary course, would reasonably be expected to result in a
Material Adverse Effect, or (ii) any charter or other internal restrictions
which, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect.
C. Schedule 5.8C contains a true, correct and complete list of
all the Material Contracts in effect on the Closing Date after giving effect to
the Approved Plan of Reorganization.
5.9. GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to
regulation under (i) the Public Utility Holding Company Act of 1935, (ii) the
Federal Power Act (other than as a "qualifying small power production facility",
as such term is defined in PURPA), (iii) the Interstate Commerce Act, (iv) the
Investment Company Act of 1940, or (v) any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable.
5.10. SECURITIES ACTIVITIES.
A. Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Revolving
Loan, not more than 25% of the value of the assets (either of Company only or of
Company and its Subsidiaries on a consolidated basis) subject to the provisions
of subsection 7.2 or 7.7 or subject to any restriction contained in any
agreement or instrument, between Company and any Lender or any Affiliate of any
Lender, relating to Indebtedness and within the scope of subsection 8.2, will be
Margin Stock.
5.11. EMPLOYEE BENEFIT PLANS.
A. Company, each of its Subsidiaries and, with respect to
Pension Plans and Multiemployer Plans, each of their respective ERISA Affiliates
are in material compliance with all applicable provisions and requirements of
ERISA, the regulations and
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published interpretations thereunder and other applicable law with respect to
each Employee Benefit Plan, and have performed all of their material obligations
under each Employee Benefit Plan. Company and each of its Subsidiaries are in
material compliance with all applicable laws and orders of foreign Government
Authorities with respect to each of its pension plans and employee benefit plans
for foreign employees, and have performed all of their material obligations
under each such pension plan and employee benefit plan. Each Employee Benefit
Plan that is intended to qualify under Section 401(a) of the Internal Revenue
Code has received, or has timely taken all action necessary to receive, a
favorable determination letter from the Internal Revenue Service to such effect
and no event has occurred (other than the enactment of legislation for which the
remedial amendment period has not expired) that would reasonably be expected to
affect adversely such Plan's qualification.
B. No ERISA Event has occurred or is reasonably expected to
occur.
C. Except to the extent required under Section 4980B of the
Internal Revenue Code or except as set forth in Schedule 5.11 annexed hereto or
in the financial statements delivered to Lenders pursuant to subsection 4.1 or
6.1 hereof, as applicable, no Employee Benefit Plan provides health or welfare
benefits (through the purchase of insurance or otherwise) for any retired or
former employee of Company or any of its Subsidiaries (including CPIH
Subsidiaries, to the extent such CPIH Subsidiaries are ERISA Affiliates of
Company or any of its Subsidiaries).
D. As of January 1 of each year (based on, with respect to the
Covanta Energy Pension Plan, the actuarial valuation as of such January 1 and,
with respect to the SEIU Pension Plan, the actuarial valuation as of the
immediately preceding June 1), the amount of unfunded benefit liabilities (as
defined in Section 4001(a)(18) of ERISA, but determined on the basis of the
actuarial assumptions used for funding purposes with respect to a Pension Plan
(as set forth in Section 412 of the Internal Revenue Code, including, where
applicable, the interest rate assumptions set forth in Section 412(l) of the
Internal Revenue Code)), in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed (i) $20,000,000, in the event the
applicable law (including statutorily prescribed actuarial assumptions) used in
determining such unfunded benefit liabilities (the "ASSUMPTIONS") is generally
as favorable as the Assumptions used in the 2003 plan year valuations with
respect to such Pension Plans, or (ii) $26,000,000, in the event the Assumptions
are generally less favorable than the Assumptions used in the 2003 plan year
valuations with respect to such Pension Plans.
E. To each Borrower's knowledge, as of the most recent
valuation date for each Multiemployer Plan for which the actuarial report (or an
estimate provided pursuant to Section 4221(e) of ERISA) is reasonably available
to Company, the potential withdrawal liability of Company, its Subsidiaries and
their respective ERISA Affiliates for a complete withdrawal from such
Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with the potential liability for a complete withdrawal from all other
Multiemployer Plans for which such actuarial report (or an estimate provided
pursuant to
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Section 4221(e) of ERISA) is reasonably available to Company, based on the
information contained in such reports, would not reasonably be expected to
exceed $7,500,000.
F. Neither Company nor any Subsidiary has incurred or is
reasonably expected to incur any material liability pursuant to Title IV of
ERISA with respect to any employee benefit plan of an entity that was formerly
an ERISA Affiliate of Company or any of its Subsidiaries or with respect to any
employee benefit plan that was previously maintained by Company or any of its
Subsidiaries (including CPIH Subsidiaries, to the extent such CPIH Subsidiaries
are ERISA Affiliates of Company or any of its Subsidiaries).
5.12. CERTAIN FEES.
No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby, and
each Borrower hereby indemnifies Lenders against, and agrees that it will hold
Lenders harmless from, any claim, demand or liability for any such broker's or
finder's fees alleged to have been incurred in connection herewith or therewith
and any expenses (including reasonable fees, expenses and disbursements of
counsel) arising in connection with any such claim, demand or liability.
5.13. ENVIRONMENTAL PROTECTION.
A. Except as set forth in Schedule 5.13 annexed hereto,
neither Company nor any of its Subsidiaries (including, solely with respect to
periods prior to the Closing Date, CPIH Subsidiaries) nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to (a)
any Environmental Law, (b) any Environmental Claim, or (c) any Hazardous
Materials Activity that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or impose liability on any Lender or
Agent;
B. Except as set forth in Schedule 5.13 annexed hereto,
neither Company nor any of its Subsidiaries (including, solely with respect to
periods prior to the Closing Date, CPIH Subsidiaries) has received any letter or
request for information under Section 104 of CERCLA or any comparable state law
regarding any condition, occurrence or activity that could reasonably be
expected to form the basis of an Environmental Claim against Company or any of
its Subsidiaries (including, solely with respect to periods prior to the Closing
Date, CPIH Subsidiaries) that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect or impose liability on
any Lender or Agent;
C. Except as set forth in Schedule 5.13 annexed hereto, there
are and, to Company's knowledge, have been no conditions, occurrences, or
Hazardous Materials Activities that could reasonably be expected to form the
basis of an Environmental Claim against Company or any of its Subsidiaries
(including, solely with respect to periods prior to the Closing Date, CPIH
Subsidiaries) that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or impose liability on any Lender or
Agent;
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D. Except as set forth in Schedule 5.13 annexed hereto, (i)
neither Company nor any of its Subsidiaries (including, solely with respect to
periods prior to the Closing Date, CPIH Subsidiaries) nor, to Company's
knowledge, any predecessor of Company or any of its Subsidiaries (including,
solely with respect to periods prior to the Closing Date, CPIH Subsidiaries) has
filed any notice under any Environmental Law indicating past or present
treatment of Hazardous Materials at any Facility, (ii) none of Company's or any
of its Subsidiaries' Facilities constitute facilities for the treatment, storage
or disposal of Hazardous Materials under RCRA or any state equivalent, and (iii)
none of Company's or any of its Subsidiaries' operations involves the
generation, transportation, treatment, storage or disposal of hazardous waste in
violation of RCRA or any state equivalent that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect or
impose liability on any Lender or Agent; and
E. Compliance with all current requirements pursuant to or
under Environmental Laws would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect or impose liability on any
Lender or Agent.
5.14. EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
5.15. MATTERS RELATING TO COLLATERAL.
A. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution
and delivery of the Collateral Documents by Credit Parties, together with (x)
the actions taken on or prior to the date hereof pursuant to subsections 4.1M,
4.1N, 6.8, 6.9 and 6.11 and (y) the delivery to Collateral Agent of any Pledged
Collateral of the Credit Parties not delivered to Collateral Agent at the time
of execution and delivery of the applicable Collateral Document (all of which
Pledged Collateral has been so delivered) are effective to create in favor of
Collateral Agent, for the benefit of Secured Parties, a Lien on all of the
Collateral of the Credit Parties (which Lien has priority over any other Lien on
such Collateral, subject to Permitted Encumbrances and Liens permitted under
subsection 7.2A), and all filings and other actions necessary or desirable to
perfect and maintain the perfection and such priority of such Liens have been
duly made or taken and remain in full force and effect, other than the filing of
any UCC financing statements delivered to Collateral Agent for filing (but not
yet filed) and the periodic filing of UCC continuation statements in respect of
UCC financing statements filed by or on behalf of Collateral Agent.
B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or
other action by, and no notice to or filing with, any Government Authority is
required for either (i) the pledge or grant by any Credit Party of the Liens
purported to be created in favor of Collateral Agent pursuant to any of the
Collateral Documents or (ii) the exercise by Collateral Agent of any rights or
remedies in respect of any Collateral (whether specifically granted or created
pursuant to any of the Collateral Documents or created or provided for by
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applicable law), except (a) for filings or recordings contemplated by subsection
5.15A, (b) as may be required, in connection with the disposition of any Pledged
Collateral, by laws generally affecting the offering and sale of securities, and
(c) authorizations and approvals in respect of the exercise of rights or
remedies as to any collateral of any Credit Party which is subject to regulation
under the Federal Power Act pursuant to Section 210(e)(2) of PURPA.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have
been filed in favor of Collateral Agent as contemplated by subsection 5.15A and
to evidence Liens permitted pursuant to subsection 7.2, (i) no effective UCC
financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or recording
office, and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO.
D. MARGIN REGULATIONS. The pledge of the Pledged Collateral
pursuant to the Collateral Documents does not violate Regulation T, U or X of
the Board of Governors of the Federal Reserve System.
E. INFORMATION REGARDING COLLATERAL. All information supplied
to Collateral Agent by any Credit Party (including its officers, employees,
agents, advisors, representatives or counsel) with respect to any of the
Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
5.16. DISCLOSURE.
No representation or warranty of Company or any of its
Subsidiaries (including CPIH Subsidiaries) contained in any Credit Document or
in any other certificate or written statement (excluding the projections, pro
forma financial statements and forward looking statements contained therein and
the estimates contained in such projections, pro forma financial statements and
forward looking statements) furnished to Lenders by Company or any of its
Subsidiaries (including CPIH Subsidiaries), including any such Person's
officers, employees, agents, advisors, representatives or counsel, for use in
connection with the transactions contemplated by this Agreement contained as of
the date such representation or warranty was made any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements contained herein or therein not misleading in any material respect in
light of the circumstances in which the same were made and in light of such
representations and warranties and all such prior representations and
warranties, taken as a whole. Any projections and pro forma financial
information contained in such materials are based upon good faith estimates and
assumptions believed by each Borrower to be reasonable at the time made, it
being recognized by Lenders that such projections as to future events are
subject to significant business, economic, regulatory and competitive
uncertainties and contingencies, and, accordingly, no assurances are given and
no representations or warranties are made by Company or any of its Subsidiaries
that any of the estimates and assumptions are correct, that the projections will
be achieved or that the forward looking statements expressed in such information
will correspond to actual results.
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5.17. CASH MANAGEMENT SYSTEM.
The summary of the Cash Management System attached hereto as
Schedule 4.1P is accurate and complete in all material respects as of the
Closing Date and does not omit to state any material fact necessary to make the
statements set forth therein not misleading. No Borrower has any Deposit Account
which is not described in Schedule 4.1P other than Deposit Accounts permitted to
be owned after the Closing Date pursuant to subsection 6.10. There has been no
change to the Cash Management System since the Closing Date except such changes
as are permitted under subsection 6.10 and such other changes as have been
disclosed to Lenders in writing and approved by Administrative Agent.
5.18. MATTERS RELATING TO CREDIT PARTIES.
A. CREDIT PARTIES. Neither Company nor any of its Subsidiaries
owns any interest in any Subsidiary which is not a Borrower (other than Excluded
Subsidiaries).
B. DOMESTIC SUBSIDIARY ASSETS. Each Subsidiary which is a
Borrower has granted a Lien in favor of Collateral Agent on substantially all of
its property (other than the Capital Stock of CPIH) pursuant to the Collateral
Documents except in any case where the grant of such Lien would constitute a
material violation of a valid and enforceable Contractual Obligation in favor of
or for the benefit of a Person other than Company or any of its Subsidiaries and
their respective Affiliates for which the required consents have not been
obtained.
C. SUBSIDIARY CAPITAL STOCK. The Capital Stock of each
Subsidiary which is directly owned by any Borrower has been pledged to
Collateral Agent pursuant to the Collateral Documents, except for the Capital
Stock of those Subsidiaries (other than Borrowers) (i) which is subject to a
Lien permitted under subsection 7.2A securing Indebtedness permitted under
subsection 7.1, or (ii) the pledge of which would constitute a material
violation of (a) a valid and enforceable Contractual Obligation in favor of or
for the benefit of a Person other than Company or any of its Subsidiaries and
their respective Affiliates for which the required consents have not been
obtained or (b) applicable law affecting such Borrower or such Subsidiary.
5.19. INVESTIGATION.
All obligations in existence immediately after the Closing
Date (other than obligations that do not, in the aggregate, exceed $2,000,000)
to extend credit or credit support or obtain the extension of credit or credit
support or to make investments or expenditures with respect to existing or
future Projects of any Borrower or any Subsidiary of any Borrower that are
contained in Contractual Obligations or of which Borrowers are otherwise aware
have been disclosed to Administrative Agent prior to the Closing Date. Borrowers
have made such inquiry and investigation as is necessary to enable Borrowers to
make the representation contained in the preceding sentence.
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5.20. MATTERS RELATING TO BANKRUPTCY PROCEEDINGS.
A. PLAN OF REORGANIZATION. As of the Closing Date, there have
been no material modifications, amendments revisions or restatements of the
Approved Plan of Reorganization. Any representation and warranty made by
Borrowers or any Subsidiary in the Approved Plan of Reorganization is accurate,
true and correct in all material respects as of the Closing Date (or, to the
extent such representations and warranties specifically relate to an earlier
date, that such representations and warranties were accurate, true and correct
in all material respects as of such earlier date).
B. CONFIRMATION ORDER. The Confirmation Order has been entered
by the Bankruptcy Court at least 11 days prior to the Closing Date. The
Confirmation Order has not been stayed pending any appeal or petition for review
or for rehearing.
5.21. SUBORDINATED INDEBTEDNESS.
The Obligations constitute senior indebtedness that is
entitled to the benefits of the subordination provisions, if any, of all
Indebtedness of Company and its Subsidiaries under the Unsecured Creditor Notes.
5.22. REPORTING TO IRS.
Company does not intend to treat the Revolving Loans and
Letters of Credit, and related transactions, as being a "reportable transaction"
(within the meaning of Treasury Regulation Section 1.6011-4). In the event
Company determines to take any action inconsistent with such intention, it will
promptly notify Administrative Agent thereof. Company acknowledges that one or
more Lenders may treat their Revolving Loans and Letters of Credit as part of a
transaction that is subject to Treasury Regulation section 1.6011-4 or section
301.6112-1, and Administrative Agent and such Lender or Lenders, as applicable,
may file such IRS forms or maintain such lists and other records as they may
determine is required by such Treasury Regulations.
5.23. SOLVENCY.
Borrowers (taken as a whole) and Company are, and, upon the
incurrence of any Obligations by such Borrowers on any date on which this
representation is made, will be, Solvent.
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS
Borrowers covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all
Obligations and the cancellation or expiration of all Letters of Credit, unless
Requisite Lenders shall otherwise give prior written consent, Borrowers shall
perform, and shall cause each of their Subsidiaries to perform, all covenants in
this Section 6.
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6.1. FINANCIAL STATEMENTS AND OTHER REPORTS.
Borrowers will maintain, and cause each of their respective
Subsidiaries to maintain, a system of accounting established and administered in
accordance with sound business practices to permit preparation of financial
statements in conformity with GAAP. Borrowers will deliver to Administrative
Agent (and, promptly after receipt thereof, Administrative Agent will deliver a
copy to each Lender):
(i) Budget Report; Budget Update: as soon as available and in
any event no later than the 15th Business Day of each month commencing
with the 15th Business Day of April 2004, (a) for the month most
recently ended, a report in form satisfactory to Administrative Agent
reflecting the actual cash receipts and disbursements of Company and
its Subsidiaries for the preceding month with respect to each line item
described in the Budget for the current Fiscal Year and the percentage
and dollar variance of such amounts from the projected amounts therefor
set forth in (x) such Budget and (y) the Budget for the current Fiscal
Year as delivered pursuant to subsection 6.1(xvi), accompanied by an
Officer's Certificate from the chief financial officer of Company
certifying that such report accurately presents, in all material
respects, cash receipts and cash expenditures of Company and its
Subsidiaries for the periods indicated, and (b) a supplement to the
Budget for the current Fiscal Year, in the form of such Budget,
reflecting projected cash receipts and disbursements of Company and its
Subsidiaries for each month and each Fiscal Quarter remaining in the
current Fiscal Year with respect to each line item described in such
Budget, which supplement shall be accompanied by an Officer's
Certificate from the chief financial officer of Company certifying that
the projections contained in such supplement are based upon good faith
estimates and assumptions believed by Company to be reasonable at the
time made;
(ii) Events of Default, etc.: promptly upon any Officer of
Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a
claimed Event of Default or Potential Event of Default, (b) that any
Person has given any notice to Company or any of its Subsidiaries or
taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 8.2, (c) of any
condition or event that would be required to be disclosed in a current
report filed by Company with the Securities and Exchange Commission on
Form 8-K if Company were required to file such reports under the
Exchange Act, or (d) of the occurrence of any event or change that has
caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, an Officer's Certificate specifying the nature and
period of existence of such condition, event or change, or specifying
the notice given or action taken by any such Person and the nature of
such claimed Event of Default, Potential Event of Default, default,
event or condition, and what action Company has taken, is taking and
proposes to take with respect thereto;
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(iii) Quarterly Financials: as soon as available and in any
event within 45 days after the end of each of the first three Fiscal
Quarters of each Fiscal Year, the consolidated balance sheet of Company
and its Subsidiaries as at the end of such Fiscal Quarter and the
related consolidated statement of income of Company and its
Subsidiaries for such Fiscal Quarter and the related consolidated
statements of stockholders' equity and cash flows of Company and its
Subsidiaries for the period from the beginning of the then current
Fiscal Year to the end of such Fiscal Quarter, setting forth in each
case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year, all in reasonable
detail and certified by the chief financial officer of Company that
they fairly present, in all material respects, the financial condition
of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments; provided, however, that so long as Company files a
quarterly report on Form 10Q with the Securities and Exchange
Commission for any Fiscal Quarter, Borrowers shall be required to
deliver a copy of such quarterly report in lieu of the financial
statements described in this subsection 6.1(iii);
(iv) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the
consolidated balance sheet of Company and its Subsidiaries as at the
end of such Fiscal Year and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows of Company
and its Subsidiaries for such Fiscal Year, setting forth in each case
in comparative form the corresponding figures for the previous Fiscal
Year, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present, in all material respects,
the financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated, and (b) an audit report thereon of independent
certified public accountants of recognized national standing selected
by Company and satisfactory to Administrative Agent, which report shall
(with respect to the audits for all Fiscal Years after 2003) be
unqualified, shall express no doubts, assumptions or qualifications
concerning the ability of Company and its Subsidiaries to continue as a
going concern, and shall (with respect to the audits for all Fiscal
Years including 2003) state that in the opinion of such certified
public accountants such consolidated financial statements fairly
present, in all material respects, the consolidated financial position
of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated in conformity with GAAP and that the audit by such
accountants in connection with such consolidated financial statements
has been made in accordance with auditing standards generally accepted
in the United States; provided, however, that so long as Company files
an annual report on Form 10K with the Securities Exchange Commission,
Borrowers shall be required to deliver a copy of such annual report in
lieu of the financial statements described in clause (a);
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(v) Compliance Certificates: together with each delivery of
financial statements of Company and its Subsidiaries pursuant to
subdivisions (iii) and (iv) above, (a) an Officer's Certificate of
Company stating that the signers have reviewed the terms of this
Agreement and have made, or caused to be made under their supervision,
a review in reasonable detail of the transactions and condition of
Company and its Subsidiaries during the accounting period covered by
such financial statements and that such review has not disclosed the
existence during or at the end of such accounting period, and that the
signers do not have knowledge of the existence as at the date of such
Officer's Certificate, of any condition or event that constitutes an
Event of Default or Potential Event of Default, or, if any such
condition or event existed or exists, specifying the nature and period
of existence thereof and what action Company has taken, is taking and
proposes to take with respect thereto; and (b) a Compliance Certificate
demonstrating in reasonable detail compliance during and at the end of
the applicable accounting periods with the restrictions contained in
Section 7, in each case to the extent compliance with such restrictions
is required to be tested at the end of the applicable accounting
period;
(vi) Reconciliation Statements: other than the fresh start
adjustments required under SOP 90-7, if, as a result of any change in
accounting principles and policies from those used in the preparation
of the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Company and its Subsidiaries
delivered pursuant to subdivisions (iii) or (iv) of this subsection 6.1
will differ in any material respect from the consolidated financial
statements that would have been delivered pursuant to such subdivisions
had no such change in accounting principles and policies been made,
then (a) together with the first delivery of financial statements
pursuant to subdivision (iii) or (iv) of this subsection 6.1 following
such change, consolidated financial statements of Company and its
Subsidiaries for (y) the current Fiscal Year to the effective date of
such change and (z) the two full Fiscal Years immediately preceding the
Fiscal Year in which such change is made, in each case prepared on a
pro forma basis as if such change had been in effect during such
periods, and (b) together with each delivery of financial statements
pursuant to subdivision (iii) or (iv) of this subsection 6.1 following
such change, if required pursuant to subsection 1.2, a written
statement of the chief accounting officer or chief financial officer of
Company setting forth the differences (including any differences that
would affect any calculations relating to the financial covenants set
forth in subsection 7.6) which would have resulted if such financial
statements had been prepared without giving effect to such change;
(vii) Accountants' Certification: together with each delivery
of consolidated financial statements of Company and its Subsidiaries
pursuant to subdivision (iv) above, a written statement by the
independent certified public accountants giving the report thereon
stating that in connection with their audit, nothing came to their
attention that caused them to believe that Company failed to comply
with the terms, provisions or conditions of subsection 7.6, insofar as
they relate to financial and accounting matters, or, if such a failure
to comply has come to their attention,
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specifying the nature and period of existence thereof (it being
understood that their audit is not directed primarily toward obtaining
knowledge of non-compliance and that such accountants shall not be
liable by reason of any failure to obtain knowledge of any such
non-compliance that would not be disclosed in the course of their
audit);
(viii) Accountants' Reports: promptly upon request of
Administrative Agent (unless restricted by applicable professional
standards), copies of all reports submitted to Company by independent
certified public accountants in connection with each annual, interim or
special audit of the financial statements of Company and its
Subsidiaries made by such accountants, including any comment letter
submitted by such accountants to management in connection with their
annual audit;
(ix) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by
Company to its security holders or by any Subsidiary of Company to its
security holders other than Company or another Subsidiary of Company,
(b) all regular and periodic reports and all registration statements
(other than on Form S-8 or a similar form) and prospectuses, if any,
filed by Company or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press
releases and other statements made available generally by Company or
any of its Subsidiaries to the public concerning material developments
in the business of Company or any of its Subsidiaries;
(x) Litigation or Other Proceedings: (a) promptly upon any
officer of Company obtaining knowledge of (1) the institution of, or
non-frivolous threat of, any Proceeding against or affecting Company or
any of its Subsidiaries or any property of Company or any of its
Subsidiaries not previously disclosed in writing by Company to Lenders
or (2) any material development in any Proceeding that, in the case of
both clauses (1) and (2):
(1) if adversely determined, has a reasonable
possibility after giving effect to the coverage and policy
limits of insurance policies issued to Company and its
Subsidiaries of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, or to contest or challenge the legality, validity
or enforceability of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within 20 days after the end of each
Fiscal Quarter, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, an Borrower equal to or
greater than $1,000,000, and promptly after request by Administrative
Agent such other information as may be reasonably requested by
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Administrative Agent to enable Administrative Agent and its counsel to
evaluate any of such Proceedings;
(xi) ERISA Events: with reasonable promptness upon becoming
aware of the occurrence of or forthcoming occurrence of (a) any ERISA
Event or (b) any event that would constitute an ERISA Event but for the
requirements (in order for such event to constitute an ERISA Event)
that a Lien or liability imposed as a result thereof be material, that
the error giving rise thereto be in bad faith, and/or that such event
would reasonably be expected to result in a Material Adverse Effect, a
written notice specifying the nature thereof, what action Company, any
of its Subsidiaries or any of their respective ERISA Affiliates has
taken, is taking or proposes to take with respect thereto and, when
known, any action taken or threatened in writing by the Internal
Revenue Service, the Department of Labor or the PBGC with respect
thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a)
all notices received by Company, any of its Subsidiaries or any of
their respective ERISA Affiliates from a Multiemployer Plan sponsor
concerning an ERISA Event; and (b) copies of such other documents or
governmental reports or filings relating to any Employee Benefit Plan
as Administrative Agent shall reasonably request (it being agreed that
commencing on the Closing Date, on an annual basis Borrowers shall
request information from each Multiemployer Plan in accordance with
section 4221 of ERISA to determine the potential withdrawal liability
of Company, its Subsidiaries and their respective ERISA Affiliates for
a complete withdrawal from such Multiemployer Plan);
(xiii) Insurance: as soon as practicable after any material
change in insurance coverage maintained by Company and its Subsidiaries
notice thereof to Administrative Agent specifying the changes and
reasons therefor;
(xiv) Governing Body: with reasonable promptness, written
notice of any change in the Governing Body of Company;
(xv) Material Contracts: promptly, and in any event within 10
Business Days after any Material Contract of Company or any of its
Subsidiaries is terminated or amended in a manner that is materially
adverse to Company or such Subsidiary, as the case may be, or any new
Material Contract is entered into, a written statement describing such
event with copies of such material amendments or new contracts, and an
explanation of any actions being taken with respect thereto;
(xvi) Budget: no later than the 15th day of December of each
year commencing with December 15, 2004, a budget for the next Fiscal
Year, in the form of the Budget for the current Fiscal Year, reflecting
(a) projected cash receipts and disbursements of Company and its
Subsidiaries for each month and each Fiscal Quarter in the next Fiscal
Year and (b) projected net cash flows of Company and its Subsidiaries
for each Fiscal Year following the next Fiscal Year and ending with
2009, in each case with respect to each line item described in the
Budget for the
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current Fiscal Year, which budget shall be accompanied by an Officer's
Certificate from the chief financial officer of Company certifying that
the projections contained in such budget are based upon good faith
estimates and assumptions believed by Company to be reasonable at the
time made;
(xvii) New Restricted Accounts: promptly upon opening any
Restricted Account after the Closing Date that is required to be opened
by Company or any of its Subsidiaries pursuant to a Contractual
Obligation binding on such Person, a written notice setting forth in
reasonable detail (a) the Project or obligation to which such account
relates, (b) a description of the Contractual Obligation requiring such
account to be opened and (c) the provisions of this Agreement
permitting such account to be opened and maintained (it being
understood that such written notice shall be deemed to supplement
Schedule 2.3A(i)(f) annexed hereto for all purposes of this Agreement);
(xviii) Other Information: with reasonable promptness, such
other information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by
Administrative Agent or Requisite Lenders (or by any Lender so long as
such request is made through Administrative Agent (and Administrative
Agent shall be required to request from Borrowers any such information
and data reasonably requested by a Lender)); and
(xix) Notices from Holders of Subordinated Indebtedness:
promptly, upon receipt, copies of all notices from holders of
Subordinated Indebtedness or a trustee, agent or other representative
of such a holder.
6.2. EXISTENCE, ETC.
Except as permitted under subsection 7.7, Company will, and
will cause each of its Subsidiaries to, at all times preserve and keep in full
force and effect its existence and all rights and franchises material to its
business; provided, however, that neither Company nor any of its Subsidiaries
shall be required to preserve the existence of any such Subsidiary or any such
right or franchise if the management or Governing Body of Company or such
Subsidiary shall determine that the preservation thereof is no longer desirable
in the conduct of the business of Company or such Subsidiary, as the case may
be, and the loss thereof could not reasonably be expected to have a Material
Adverse Effect.
6.3. PAYMENT OF TAXES AND CLAIMS; TAX.
Company will, and will cause each of its Subsidiaries to, pay
all taxes, assessments and other governmental charges imposed upon it or any of
its properties or assets or in respect of any of its income, businesses or
franchises before any material penalty accrues thereon, and all claims
(including claims for labor, services, materials and supplies) for material sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided, that no such tax, assessment,
charge or claim need be
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paid if it is being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, so long as (i) such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor and (ii) in the case of a tax, assessment, charge
or claim which has or may become a Lien against any of the Collateral, such
proceedings conclusively operate to stay the sale of any portion of the
Collateral to satisfy such charge or claim.
6.4. MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
INSURANCE/ CONDEMNATION PROCEEDS.
A. MAINTENANCE OF PROPERTIES. Company will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Company and its Subsidiaries
(including all Intellectual Property) and from time to time will make or cause
to be made all appropriate repairs, renewals and replacements thereof, except
that Company and its Subsidiaries shall not be required to perform the foregoing
obligations (i) with respect to Subsidiaries or assets to which Persons other
than Company and its Subsidiaries have recourse under Limited Recourse Debt owed
to such Persons or (ii) to the extent that failure to perform such obligations
would not reasonably be expected to have a Material Adverse Effect.
B. INSURANCE. Company will maintain or cause to be maintained,
with financially sound and reputable insurers, such public liability insurance,
third party property damage insurance, business interruption insurance and
casualty insurance with respect to liabilities, losses or damage in respect of
the assets, properties and businesses of Company and its Subsidiaries and, for
not less than one year following the Closing Date, of CPIH Subsidiaries
(provided, that Company shall not be required to maintain such insurance with
respect to CPIH Subsidiaries to the extent such insurance is not commercially
available to Company) as may customarily be carried or maintained under similar
circumstances by corporations of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for corporations similarly situated in the industry.
Without limiting the generality of the foregoing, Company will maintain or cause
to be maintained (i) flood insurance with respect to each Flood Hazard Property
that is located in a community that participates in the National Flood Insurance
Program, in each case in compliance with any applicable regulations of the Board
of Governors of the Federal Reserve System, and (ii) replacement value casualty
insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are at all times satisfactory to Administrative Agent in its
commercially reasonable judgment. Unless prohibited by contractual or other
legal requirement, such policy of insurance shall (a) name Collateral Agent for
the benefit of Secured Parties as an additional insured thereunder as its
interests may appear and (b) in the case of each business interruption and
casualty insurance policy, contain a loss payable clause or endorsement,
satisfactory in form and substance to Administrative Agent, that names
Collateral Agent for the benefit of Secured Parties as the loss payee thereunder
for any covered loss in excess of $1,000,000 and provides for at least
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30 days prior written notice to Collateral Agent of any modification or
cancellation of such policy. As soon as practicable after the Closing Date,
Company shall deliver to Administrative Agent a certificate from Borrowers'
insurance broker(s) or other evidence satisfactory to it that all insurance
required to be maintained pursuant to this subsection 6.4 is in full force and
effect and that Collateral Agent on behalf of Secured Parties has been named as
additional insured and/or loss payee thereunder to the extent required under
this subsection 6.4.
C. APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.
(i) Business Interruption Insurance. Upon receipt by Company
or any of its Subsidiaries of any business interruption insurance
proceeds constituting Net Insurance/Condemnation Proceeds, (a) so long
as no Event of Default or Potential Event of Default shall have
occurred and be continuing, Company or such Subsidiary may retain and
apply such Net Insurance/Condemnation Proceeds for working capital
purposes or any other purposes not prohibited under this Agreement, and
(b) if an Event of Default or Potential Event of Default shall have
occurred and be continuing, Company shall apply an amount equal to such
Net Insurance/Condemnation Proceeds as provided in subsection 2.4A.
(ii) Net Insurance/Condemnation Proceeds Received by Company.
Upon receipt by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds other than from business interruption
insurance, (a) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing, Company shall, or shall
cause one or more of its Subsidiaries to, promptly and diligently apply
such Net Insurance/Condemnation Proceeds to pay or reimburse the costs
of repairing, restoring or replacing the assets in respect of which
such Net Insurance/Condemnation Proceeds were received or, to the
extent not so applied, as provided in subsection 2.4A, and (b) if an
Event of Default or Potential Event of Default shall have occurred and
be continuing (unless Company is otherwise required to use funds by law
or contract), Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds as provided in subsection 2.4A.
(iii) Net Insurance/Condemnation Proceeds Received by
Administrative Agent or Collateral Agent. Upon receipt by
Administrative Agent or Collateral Agent, as the case may be, of any
Net Insurance/Condemnation Proceeds, (a) if and to the extent Company
would have been required to apply such Net Insurance/Condemnation
Proceeds (if it had received them directly) Administrative Agent or
Collateral Agent, as the case may be, shall, and Company hereby
authorizes Administrative Agent or Collateral Agent, as the case may
be, to apply such Net Insurance/Condemnation Proceeds as provided in
subsection 2.4A, and (b) to the extent the foregoing clause (a) does
not apply Administrative Agent or Collateral Agent, as the case may be,
shall deliver such Net Insurance/Condemnation Proceeds to Company, and
(1) Company and its Subsidiaries may retain and apply any portion
thereof that is business interruption insurance proceeds for working
capital purposes or any other purposes not prohibited under this
Agreement and (2) Company shall, or
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shall cause one or more of its Subsidiaries to, promptly apply such Net
Insurance/Condemnation Proceeds that are not business interruption
insurance proceeds to the costs of repairing, restoring, or replacing
the assets in respect of which such Net Insurance/Condemnation Proceeds
were received; provided, however, that if at any time Administrative
Agent reasonably determines (A) that Company or such Subsidiary is not
proceeding diligently with such repair, restoration or replacement or
that such repair, restoration or replacement cannot be completed within
180 days after the receipt by Administrative Agent or Collateral Agent,
as the case may be, of such Net Insurance/Condemnation Proceeds,
Administrative Agent or Collateral Agent, as the case may be, shall,
and Company hereby authorizes Administrative Agent or Collateral Agent,
as the case may be, to apply such Net Insurance/Condemnation Proceeds
as provided in subsection 2.4A.
Notwithstanding the foregoing, no Net Insurance/Condemnation
Proceeds shall be required to be applied as provided in subsection 2.4A to the
extent such application would constitute a material violation of (1) a valid
Contractual Obligation (in effect on the Closing Date or arising under the
documentation for Limited Recourse Debt permitted to be incurred under this
Agreement) in favor of or for the benefit of a Person other than Company or any
of its Subsidiaries or their respective Affiliates for which the required
consents have not been obtained or (2) applicable law affecting Company and its
Subsidiaries. Notwithstanding anything in this Agreement to the contrary, in the
event of any conflict or inconsistency between subsection 6.4C and the terms of
the Intercreditor Agreement, the terms of the Intercreditor Agreement shall
prevail.
6.5. INSPECTION RIGHTS; LENDER MEETING.
A. INSPECTION RIGHTS. Borrowers shall, and shall cause each of
their respective Subsidiaries to, permit any authorized representatives
designated by any Lender, at such Lender's expense, to visit and inspect any of
the properties of such Borrower or of any of its Subsidiaries, to inspect, copy
and take extracts from its and their financial and accounting records, and to
discuss its and their affairs, finances and accounts with its and their officers
and independent public accountants (provided, that Company may, if it so
chooses, be present at or participate in any such discussion), all upon
reasonable notice and at such reasonable times during normal business hours and
as often as may reasonably be requested; provided, that at any time after the
occurrence and during the continuance of an Event of Default, Borrowers shall,
and shall cause each of their respective Subsidiaries to, permit such additional
visits, inspections and audits as Administrative Agent or Requisite Lenders may
deem necessary or advisable, at any time or from time to time, all at Borrowers'
expense.
B. LENDER MEETING. Company will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.
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6.6. COMPLIANCE WITH LAWS, ETC.
Borrowers shall comply, and shall cause each of their
Subsidiaries (including CPIH Subsidiaries) to comply, with the requirements of
all applicable laws, rules, regulations and orders of any Government Authority
(including all Environmental Laws), noncompliance with which could reasonably be
expected to cause, individually or in the aggregate, a Material Adverse Effect.
6.7. ENVIRONMENTAL MATTERS.
A. ENVIRONMENTAL DISCLOSURE. Company will deliver to
Administrative Agent:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character
(excluding writings which are protected by attorney-client privilege or
the work-product doctrine or confidential self-evaluative writings),
whether prepared by personnel of Company or any of its Subsidiaries or
by independent consultants, governmental authorities or any other
Persons, with respect to significant environmental matters at any
Facility that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect or impose liability on
any Lender or Administrative Agent or with respect to any Environmental
Claims that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect or impose liability on
any Lender or Administrative Agent;
(ii) Notice of Certain Releases, Remedial Actions, Etc.
Promptly upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release required to be reported to any
federal, state or local governmental or regulatory agency under any
applicable Environmental Laws that could reasonably be expected to have
a Material Adverse Effect or impose liability on any Lender or
Administrative Agent, (b) any remedial action taken by Company or any
other Person in response to (1) any Hazardous Materials Activities the
existence of which could reasonably be expected to result in one or
more Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect or imposing liability on any Lender or
Administrative Agent, or (2) any Environmental Claims that,
individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect or impose liability on any Lender
or Administrative Agent;
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or receipt
thereof by Company or any of its Subsidiaries, a copy of any and all
written communications (excluding writings which are protected by
attorney-client privilege or the work-product doctrine or confidential
self-evaluative writings), with respect to (a) the commencement or the
threat to commence a proceeding regarding any Environmental Claims
that, individually or in the aggregate, could reasonably be expected to
result in a Material
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Adverse Effect or impose liability on any Lender or Agent, (b) any
Release required to be reported to any federal, state or local
governmental or regulatory agency that could reasonably be expected to
have a Material Adverse Effect or impose liability on any Lender or
Administrative Agent, and (c) any request for information from any
governmental agency that suggests such agency is investigating whether
Company or any of its Subsidiaries may be potentially responsible for
any Hazardous Materials Activity that could reasonably be expected to
have a Material Adverse Effect or impose liability on any Lender or
Administrative Agent;
(iv) Notice of Certain Proposed Actions Having Environmental
Impact. Prompt written notice describing in reasonable detail (a) any
proposed acquisition of stock, assets, or property by Company or any of
its Subsidiaries that could reasonably be expected to (1) expose
Company or any of its Subsidiaries to, or result in, Environmental
Claims that could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect or impose liability on any
Lender or Administrative Agent or (2) affect the ability of Company or
any of its Subsidiaries to maintain in full force and effect all
Governmental Authorizations required under any Environmental Laws for
their respective operations except to the extent the failure to
maintain such Governmental Authorizations could not reasonably be
expected to have a Material Adverse Effect or impose liability on any
Lender or Administrative Agent and (b) any proposed action to be taken
by Company or any of its Subsidiaries to commence manufacturing or
other industrial operations or to modify current operations in a manner
that could reasonably be expected to subject Company or any of its
Subsidiaries to any additional obligations or requirements under any
Environmental Laws that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect or impose
liability on any Lender or Administrative Agent; and
(v) Certain Communications. With respect to documents which
would have been required to be provided to Administrative Agent
pursuant to paragraph (i) or (iii) but for the parenthetical in those
paragraphs, Company shall promptly upon receiving such documents
provide a list identifying generally the documents not disclosed and
summarizing the information contained in such documents to the extent
consistent with not waiving any privilege with respect thereto. If the
privilege prevents Company from summarizing the information contained
in such documents Company (a) shall nevertheless advise Administrative
Agent that a matter, the nature of which cannot be disclosed without
waiving the applicable privilege, exists with respect to a specified
Facility or Environmental Claim that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect and
(b) shall provide such other information to Administrative Agent,
consistent with not waving the privilege, that Administrative Agent may
reasonably request.
B. COMPANY'S ACTIONS REGARDING ENVIRONMENTAL CLAIMS AND
VIOLATIONS OF ENVIRONMENTAL LAWS. Company shall promptly take, and shall cause
each of its Subsidiaries promptly to take, any and all actions necessary to (i)
cure any violation of applicable Environmental Laws by Company or its
Subsidiaries (including, solely with
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respect to periods prior to the Closing Date, CPIH Subsidiaries) that could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect and (ii) make an appropriate response to any Environmental Claim
against Company or any of its Subsidiaries (including, solely with respect to
periods prior to the Closing Date, CPIH Subsidiaries) and discharge any
obligations it may have to any Person thereunder where failure to do so could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect (except if Company and its Subsidiaries do not have standing to
contest or respond to such Environmental Claim); provided, however, that Company
may, without breaching the requirements of this subsection 6.7B, contest an
alleged violation of Environmental Laws or an Environmental Claim in good faith
by appropriate proceedings promptly instituted and diligently conducted so long
as during such contest the failure to cure such violation or to respond to such
Environmental Claim or discharge the obligations thereunder could not reasonably
be expected to result in a Material Adverse Effect.
6.8. EXECUTION OF BORROWER JOINDER AGREEMENT AND PERSONAL PROPERTY
COLLATERAL DOCUMENTS AFTER THE CLOSING DATE.
A. EXECUTION OF BORROWER JOINDER AGREEMENT AND PERSONAL
PROPERTY COLLATERAL DOCUMENTS. In the event that any Subsidiary of Company
existing on the Closing Date ceases to be an Excluded Subsidiary, Company will
promptly notify Administrative Agent of that fact and cause such Subsidiary
promptly (and in any event no later than 30 days after it ceases to be an
Excluded Subsidiary) to execute and deliver to Administrative Agent a Borrower
Joinder Agreement and counterparts of the Security Agreement and the
Intercreditor Agreement and to take all such further actions and execute all
such further documents and instruments (including actions, documents and
instruments comparable to those described in subsection 4.1M) as may be
necessary or, in the opinion of Administrative Agent, desirable to create in
favor of Collateral Agent, for the benefit of Secured Parties, a valid and
perfected First Priority security interest in all of the personal and mixed
property assets of such Subsidiary described in the applicable forms of
Collateral Documents, subject to any Liens in existence on the date such
Subsidiary ceases to be an Excluded Subsidiary to the extent permitted under
subsection 7.2A, provided, that at the request of Company in connection with
sales of assets permitted under subsection 7.7, Administrative Agent shall,
subject to the terms of the Intercreditor Agreement, direct Collateral Agent
(without need for any further consent from any Lender or Lenders) to release any
Liens on a Subsidiary's assets and/or release a Subsidiary from this Agreement
solely to the extent required by the terms of any such sales permitted under
this Agreement; provided, however, that no Capital Stock of any Subsidiary that
meets the criteria set forth in subsections 5.18C(i) or 5.18C(ii) shall be
required to be pledged as Collateral pursuant to this subsection.
B. SUBSIDIARY ORGANIZATIONAL DOCUMENTS, LEGAL OPINIONS, ETC.
Company shall deliver to Administrative Agent, together with the relevant Credit
Documents, (i) certified copies of Organizational Documents of each Subsidiary
which is becoming a Borrower pursuant to subsection 6.8A (each, an "ADDITIONAL
SUBSIDIARY BORROWER"), together with a good standing certificate from the
Secretary of State of the jurisdiction of such Subsidiary's organization and
each other state in which such Person is
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qualified to do business and, to the extent generally available, a certificate
or other evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their delivery to
Administrative Agent, (ii) a certificate executed by the secretary or similar
officer of such Subsidiary as to (a) the fact that the attached resolutions of
the Governing Body of such Subsidiary approving and authorizing the execution,
delivery and performance of such Credit Documents are in full force and effect
and have not been modified or amended and (b) the incumbency and signatures of
the officers of such Subsidiary executing such Credit Documents, and (iii) a
favorable opinion of counsel to such Subsidiary, in form and substance
satisfactory to Administrative Agent and its counsel, as to (a) the due
organization and good standing of such Subsidiary, (b) the due authorization,
execution and delivery by such Subsidiary of such Credit Documents, (c) the
enforceability of such Credit Documents against such Subsidiary and (d) such
other matters (including matters relating to the creation and perfection of
Liens in any Collateral pursuant to such Credit Documents) as Administrative
Agent may reasonably request, all of the foregoing to be satisfactory in form
and substance to Administrative Agent and its counsel.
C. RELEASE OF RESTRICTIONS. Borrowers shall use their good
faith, commercially reasonable efforts to obtain all necessary consents from all
Persons in whose favor or for whose benefit Contractual Obligations are in
effect which would be violated by (i) a pledge of the Capital Stock of any
Subsidiary of a Borrower, (ii) entry into a Borrower Joinder Agreement by a
Subsidiary which is not already a Borrower, or (iii) granting a Lien on
substantially all of the assets of a Subsidiary. The foregoing efforts shall be
exercised so as to obtain such consents as soon as practicable but no later than
90 days after the Closing Date.
6.9. MATTERS RELATING TO ADDITIONAL REAL PROPERTY COLLATERAL.
From and after the Closing Date, in the event that any
Borrower acquires any fee interest in real property or any Material Leasehold
Property, such Borrower shall, as soon as practicable after such Person acquires
such real property or Material Leasehold Property, execute, acknowledge, file,
record, do and deliver all and any further acts, deeds, conveyances, mortgages,
hypothecations, pledges, charges, assignments, financing statements and
continuations thereof, notices of assignment, transfers, certificates,
assurances and other instruments, opinions, appraisals, title insurance and
environmental reports as Administrative Agent may reasonably request to perfect
and maintain the Liens created by the Collateral Documents, including, without
limitation, deliver to Collateral Agent in proper form for recording in all
appropriate places in all applicable jurisdictions, encumbering the interest of
such Borrower in such mortgaged property; and such opinions, appraisal,
documents, title insurance, environmental reports that would have been delivered
on the Closing Date if such mortgaged were a Closing Date Mortgaged Property,
and to assure, convey, assign, transfer and confirm unto Collateral Agent, for
the benefit of the Secured Parties, the property and rights thereby conveyed and
assigned or intended to now or hereafter be conveyed or assigned or that any
Borrower may be or may hereafter become bound to convey or to assign to
Administrative Agent.
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6.10. DEPOSIT ACCOUNTS.
Borrowers shall, and shall cause each of their Subsidiaries
(other than Bankrupt Subsidiaries) to, maintain the Cash Management System as
described in Schedule 4.1P, as said Schedule 4.1P may be supplemented from time
to time pursuant to clause (i)(c) below, and Company and its Subsidiaries shall
not open or close Deposit Accounts or make other changes to the Cash Management
System without the written consent of Administrative Agent, except that (i)
Company and its Subsidiaries may open and maintain funds in Deposit Accounts
with Collateral Agent or other depository institutions after the Closing Date so
long as (a) concurrently with the opening of any such account with a depository
institution other than Collateral Agent, Borrowers shall deliver to Collateral
Agent a Control Agreement with respect to such account (unless after giving
effect to such opening Borrowers would not be in breach of the requirement set
forth in clause (i)(b)), (b) the aggregate amount on deposit at any time in all
Deposit Accounts maintained with depository institutions other than Collateral
Agent for which Control Agreements have not been delivered to Collateral Agent
shall not exceed $1,000,000, and (c) concurrently with the opening of any such
account, Borrowers shall deliver to Administrative Agent a written notice
setting forth the account number and the name of the relevant depository
institution (it being understood that such written notice shall be deemed to
supplement Schedule 4.1P annexed hereto for all purposes of this Agreement) and,
if applicable, the Project to which such account relates and the primary purpose
of such account, and (ii) after the Closing Date Company and its Subsidiaries
may open and maintain funds in Restricted Accounts that are required to be
opened by Company or any of its Subsidiaries pursuant to a Contractual
Obligation binding on such Person so long as promptly upon opening any such
account, a written notice setting forth in reasonable detail (a) the Project or
obligation to which such account relates, (b) a description of the Contractual
Obligation requiring such account to be opened, and (c) the provisions of this
Agreement permitting such account to be opened and maintained (it being
understood that such written notice shall be deemed to supplement Schedule
2.4A(iii)(f) annexed hereto for all purposes of this Agreement).
6.11. FURTHER ASSURANCES.
A. ASSURANCES. Without expense or cost to Administrative Agent
or Lenders, each Borrower shall from time to time hereafter execute,
acknowledge, file, record, do and deliver all and any further acts, deeds,
conveyances, mortgages, deeds of trust, deeds to secure debt, security
agreements, hypothecations, pledges, charges, assignments, financing statements
and continuations thereof, notices of assignment, transfers, certificates,
assurances and other instruments as Administrative Agent may from time to time
reasonably request and that do not involve a material expansion of Borrowers'
obligations or liabilities hereunder in order to carry out more effectively the
purposes of this Agreement, the other Credit Documents and the Confirmation
Order, including to subject any Collateral, intended to now or hereafter be
covered, to the Liens created by the Collateral Documents and the Confirmation
Order, to perfect and maintain such Liens, and to assure, convey, assign,
transfer and confirm unto Collateral Agent the property and rights thereby
conveyed and assigned or intended to now or hereafter be conveyed or assigned or
that any Borrower may be or may hereafter become bound to convey or to assign to
Collateral Agent or for carrying
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out the intention of or facilitating the performance of the terms of this
Agreement, any other Credit Documents or the Confirmation Order, registering or
recording this Agreement or any other Credit Document. Without limiting the
generality of the foregoing, Borrowers shall deliver to Collateral Agent,
promptly upon receipt thereof, all instruments received by Borrowers after the
Closing Date and take all actions and execute all documents necessary or
reasonably requested by Collateral Agent to perfect Collateral Agent's Liens in
any such instrument or any other Investment acquired by any Borrower.
B. FILING AND RECORDING OBLIGATIONS. Each Borrower shall
jointly and severally pay all filing, registration and recording fees and all
expenses incident to the execution and acknowledgement of any Mortgage or other
Credit Document, including any instrument of further assurance described in
subsection 6.11A, and shall pay all mortgage recording taxes, transfer taxes,
general intangibles taxes and governmental stamp and other taxes, duties,
imposts, assessments and charges arising out of or in connection with the
execution, delivery, filing, recording or registration of any Mortgage or other
Credit Document, including any instrument of further assurance described in
subsection 6.11A, or by reason of its interest in, or measured by amounts
payable under, the Notes, the Mortgages or any other Credit Document, including
any instrument of further assurance described in subsection 6.11A, (excluding
income, franchise and doing business Taxes), and shall pay all stamp Taxes and
other Taxes required to be paid on any Credit Document; provided, however, that
such Borrower may contest in good faith and through appropriate proceedings, any
such Taxes, duties, imposts, assessments and charges; provided further, however,
that such Borrower shall pay all such Taxes, duties, imposts and charges when
due to the appropriate taxing authority during the pendency of any such
proceedings if required to do so to stay enforcement thereof. If any Borrower
fails to make any of the payments described in the preceding sentence within 10
days after notice thereof from Administrative Agent (or such shorter period as
is necessary to protect the loss of or diminution in value of any Collateral by
reason of tax foreclosure or otherwise, as determined by Administrative Agent)
accompanied by documentation verifying the nature and amount of such payments,
Administrative Agent may (but shall not be obligated to) pay the amount due and
Borrowers shall jointly and severally reimburse all amounts in accordance with
the terms hereof.
C. COSTS OF DEFENDING AND UPHOLDING THE LIEN. Administrative
Agent may, upon at least 5 days' prior notice to Borrowers, (i) appear in and
defend any action or proceeding, in the name and on behalf of Administrative
Agent, Lenders or any Borrower, in which Administrative Agent or any Lender is
named or which Administrative Agent in its sole discretion determines is
reasonably likely to materially adversely affect any Mortgaged Property, any
other Collateral, any Mortgage, the Lien thereof or any other Credit Document
and (ii) institute any action or proceeding which Administrative Agent
reasonably determines should be instituted to protect the interest or rights of
Administrative Agent and Lenders in any Mortgaged Property or other Collateral
or under this Agreement or any other Credit Document. Borrowers, jointly and
severally, agree that all reasonable costs and expenses expended or otherwise
incurred pursuant to this subsection (including reasonable attorneys' fees and
disbursements) by Administrative Agent shall be paid pursuant to subsection 10.2
hereof.
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6.12. HIGH YIELD NOTES.
Company shall obtain no later than three months after the
Closing Date, ratings of the High Yield Notes from S&P and/or Moody's; provided,
however, that if such ratings shall not have been obtained by such date solely
due to inaction or a refusal to act by any such rating agency that is, in either
case, beyond the control of Borrowers (as determined in the reasonable judgment
of Administrative Agent), Borrowers shall not be in breach of this subsection
6.12 so long as Borrowers shall take all steps Administrative Agent reasonably
requests from time to time to obtain such ratings.
6.13. MOST FAVORED NATIONS PAYMENTS.
Company shall, and shall cause each of its Subsidiaries to,
extend any fees or pricing increases, to the extent such fees or pricing
increases are the direct obligation of Company or its Subsidiaries, resulting
from the amendment, waiver or modification, after the Closing Date, of the
Detroit L/C Facility Documents, on an equivalent basis (based in the case of
fees on the respective amounts of Letter of Credit Exposure outstanding (on one
hand) and the credit exposure under the Detroit L/C Facility Documents (on the
other hand)) to the Lenders regardless of whether a particular Lender has
participated in or consented to a corresponding amendment, waiver or
modification (if any) of the Credit Documents, and any such payment of
equivalent fees shall be paid in cash concurrently with the fees giving rise to
such equivalent fees.
6.14. MONTGOMERY CLOSING DATE LETTER OF CREDIT CANCELLATION.
No later than 20 Business Days after Company receives a rating
with respect to its senior debt and subordinated debt of at least "BBB" from S&P
and at least "Baa" from Moody's, Company shall cause the Montgomery Closing Date
Letter of Credit to be returned undrawn to Company for cancellation; provided,
however, that if Company is unable to obtain the return of the Montgomery
Closing Date Letter of Credit by such date as a result of inaction or refusal by
the beneficiary of the Montgomery Closing Date Letter of Credit, Borrowers shall
not be in breach of this subsection 6.14 so long as Borrowers shall prior
thereto or promptly thereafter initiate appropriate Proceedings with appropriate
Government Authorities to obtain the return of the Montgomery Closing Date
Letter of Credit.
Section 7. BORROWERS' NEGATIVE COVENANTS
Borrowers covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all
Obligations and the cancellation or expiration of all Letters of Credit, unless
Requisite Lenders shall otherwise give prior written consent, Borrowers shall
perform, and shall cause each of their Subsidiaries to perform, all covenants in
this Section 7.
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7.1. INDEBTEDNESS.
Borrowers shall not, and shall not permit their respective
Subsidiaries to, directly or indirectly, create, incur or assume, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Borrowers may become and remain liable with respect to the
Obligations and Indebtedness under the Detroit L/C Facility Documents,
the High Yield Notes, the Tax Note and the Unsecured Creditor Notes,
and Subsidiaries of Borrowers may become and remain liable with respect
to Indebtedness under the Tax Note;
(ii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations and Performance Guaranties
permitted by subsection 7.4 and, upon any matured obligations actually
arising pursuant thereto, any Indebtedness created as a result thereof;
(iii) Borrowers may become and remain liable with respect to
Indebtedness to any other Borrowers; provided, that all such
intercompany Indebtedness shall be evidenced by the Intercompany Master
Note;
(iv) Subsidiaries of Company other than Borrowers may, after
the Closing Date, become and remain liable with respect to Indebtedness
to Company or any Subsidiary of Company so long as the proceeds of such
Indebtedness are applied to working capital, capital expenditure,
maintenance, operation, payroll and other liquidity requirements in the
ordinary course of business of the Subsidiaries incurring such
Indebtedness; provided, that (a) no such Indebtedness may be incurred
at any time that Borrowers shall not be in compliance with subsection
7.6E, (b) no such Indebtedness may be incurred to make capital
expenditures if after giving effect to such expenditures Borrowers
would not be in pro forma compliance with subsection 7.6F, and (c) all
such intercompany Indebtedness shall be evidenced by the Intercompany
Master Note;
(v) Subsidiaries of Company may, after the Closing Date,
become and remain liable with respect to Indebtedness to Company or any
Subsidiary of Company the proceeds of which are applied to Development
Expenses; provided, that Development Expenses for all Projects of
Company's Subsidiaries at any time after the Closing Date, net of any
such Development Expenses that have theretofore been reimbursed after
the Closing Date by the client of the relevant Project, shall not
exceed on any date of determination an amount equal to (a) $3,000,000
plus (b) the product of $3,000,000 multiplied by the number of Fiscal
Years that have commenced following January 31, 2004 but prior to such
date of determination; and provided, further, that all such
intercompany Indebtedness shall be evidenced by the Intercompany Master
Note;
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(vi) Company and its Subsidiaries, as applicable, may remain
liable with respect to Indebtedness outstanding on the Closing Date and
described in Schedule 7.1(vi) annexed hereto;
(vii) Subsidiaries of Company may become and remain liable
with respect to Indebtedness to Company or any of its Subsidiaries the
proceeds of which are applied to make Expansions permitted under
subsection 7.3(vi) or 7.3(vii); provided, that all such intercompany
Indebtedness shall be evidenced by the Intercompany Master Note;
(viii) Subsidiaries of Company may become and remain liable
with respect to Indebtedness consisting of a converted equity
Investment by Company or another Subsidiary of Company in such
Subsidiaries, provided, that the underlying equity Investment was
permitted under this Agreement at the time of such conversion;
(ix) Company and its Subsidiaries may become and remain liable
with respect to Indebtedness under (a) Capital Leases in existence as
of the Closing Date and described in Schedule 7.1(ix) and (b) Capital
Leases entered into after the Closing Date, so long as the aggregate
amount of Indebtedness outstanding at any time with respect to Capital
Leases under clause (b) of this subsection 7.1(ix) shall not exceed
$5,000,000;
(x) Company or any Subsidiary of Company may become and remain
liable with respect to Indebtedness incurred to refinance, replace,
renew or extend, in whole or in part, Indebtedness of such Person
permitted to remain outstanding under subsection 7.1(vi); provided,
that in each case (a) the terms (excluding the interest rate and fees
payable with respect thereto, so long as such interest and fees on such
Indebtedness are not borne directly or indirectly by Company or any of
its Subsidiaries, whether through an offset to or deduction against
service or operating agreement fees to Company or its Subsidiaries or
otherwise) of such Indebtedness as refinanced, replaced, renewed or
extended, taken as a whole (considering the economic benefits and
disadvantages to Company and its Subsidiaries from such refinancing,
replacement, renewal, or extension, as well as the economic benefits
and disadvantages to Company and its Subsidiaries of the Project to
which such Indebtedness relates), shall not be more disadvantageous in
any material respect to Company and its Subsidiaries and the Lenders
than the Indebtedness so refinanced, replaced, renewed or extended, (b)
the principal amount of the Indebtedness as refinanced, replaced,
renewed or extended shall not exceed 110% of the principal amount of
the Indebtedness so refinanced, replaced, renewed or extended
(provided, that such limitation shall not apply with respect to
Indebtedness that an existing client (if such client is a Government
Authority) of a Project undertakes to service through the principal
lease, service or operating agreement of the applicable Project), (c)
no obligee or beneficiary of such Indebtedness after such refinancing,
replacement, renewal or extension shall have greater recourse to
Persons for the payment or collection of such Indebtedness than the
obligee or beneficiary of the Indebtedness so refinanced, replaced,
renewed or extended had immediately prior to such transaction
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and (d) Company shall provide to Administrative Agent reasonable prior
advance written notice of such proposed refinancing, replacement,
renewal or extension and copies of all material contracts or other
agreements being entered into in connection therewith;
(xi) Subsidiaries of Company that are obligated with respect
to Limited Recourse Debt on the Closing Date relating to
waste-to-energy Projects may, after the Closing Date, become and remain
liable with respect to Limited Recourse Debt relating to such
waste-to-energy Projects, so long as (a) all or substantially all the
proceeds of such Limited Recourse Debt are applied to Expansions of
such waste-to-energy Projects permitted under subsection 7.3(vii) or to
ensure compliance with applicable laws and regulatory requirements and
(b) the incurrence by such Subsidiary of such Limited Recourse Debt is
required by the existing client (if such client is a Government
Authority) of the relevant Project and Company shall have delivered to
Administrative Agent an Officer's Certificate to the foregoing effect;
provided, that after the occurrence and during the continuation of an
Event of Default, neither Company nor any of its Subsidiaries shall
enter into a contractual commitment to incur any such Limited Recourse
Debt;
(xii) Company may become and remain liable with respect to
Indebtedness consisting solely of its obligations under Insurance
Premium Financing Arrangements, which obligations shall not exceed at
any time $30,000,000 in the aggregate;
(xiii) Borrowers may become and remain liable with respect to
Indebtedness incurred to refinance, replace, defease, renew or extend,
in whole or in part, the High Yield Notes issued on the Closing Date;
provided, that (a) the fees, interest rates and pricing terms of such
Indebtedness as refinanced, replaced, defeased, renewed or extended,
taken as a whole (considering any extension of the term of such
Indebtedness), shall not be more disadvantageous to Company and its
Subsidiaries and the Lenders (in a manner deemed material by
Administrative Agent) than the High Yield Notes so refinanced,
replaced, defeased, renewed or extended, (b) no scheduled installment
of principal shall be required on earlier dates than the maturity date
of the High Yield Notes so refinanced, replaced, defeased, renewed or
extended, (c) the other terms (including the redemption and repayment
terms, representations and warranties, covenants and events of default)
of such Indebtedness as refinanced, replaced, defeased, renewed or
extended, taken as a whole, shall not be more disadvantageous to
Company and its Subsidiaries and the Lenders (in a manner deemed
material by Administrative Agent) than the High Yield Notes so
refinanced, replaced, defeased, renewed or extended, (d) the principal
amount of the Indebtedness as refinanced, replaced, defeased, renewed
or extended shall not exceed the sum of (1) 110% of the principal
amount of the Indebtedness so refinanced, replaced, defeased, renewed
or extended, (2) interest accrued and unpaid on such principal amount
immediately prior to such refinancing, replacement, defeasance, renewal
or extension, and (3) premiums required to be paid upon such
refinancing, replacement, defeasance, renewal or extension pursuant to
the documentation for the High Yield
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Notes so refinanced, replaced, defeased, renewed or extended, (e) the
obligations under (and the Liens securing) such Indebtedness as
refinanced, replaced, defeased, renewed or extended shall be subject to
the Intercreditor Agreement on terms substantively identical to the
terms applicable to the High Yield Notes refinanced, replaced,
defeased, renewed or extended thereby, and (f) Company shall provide to
Administrative Agent reasonable prior advance written notice of such
proposed refinancing, replacement, defeasance, renewal or extension and
copies of all material contracts or other agreements being entered into
in connection therewith;
(xiv) Company may become and remain liable with respect to
Subordinated Indebtedness to Persons other than Company and its
Subsidiaries in an aggregate amount at any time outstanding not to
exceed $10,000,000; provided, that (a) such Indebtedness shall be
unsecured and unguarantied, (b) no cash interest or cash principal
payments shall be required on such Indebtedness until the Obligations
are paid in full, (c) the interest rates maturities, amortization
schedules covenants defaults, remedies, subordination provisions and
other terms of such Indebtedness are satisfactory to Administrative
Agent and Requisite Lenders, (d) the proceeds of such Indebtedness
shall not be applied to any purpose prohibited under this Agreement,
and (e) after giving effect to the incurrence of such Indebtedness,
Borrowers shall be in pro forma compliance with subsection 7.6B;
(xv) Bankrupt Subsidiaries may become and remain liable under
intercompany loans by Company and its Subsidiaries (other than Bankrupt
Subsidiaries) to such Bankrupt Subsidiaries to the extent such loans
are permitted under subsection 7.3(xi);
(xvi) CEA may become and remain liable with respect to
Indebtedness under the CPIH Stock Pledge Agreement;
(xvii) Company and its Subsidiaries may become and remain
liable with respect to their obligations to pay for services rendered
by DHC to them under and in accordance with the Corporate Services
Reimbursement Agreement; and
(xviii) Company and its Subsidiaries may become and remain
liable with respect to other unsecured Indebtedness in an aggregate
amount at any time outstanding not to exceed $7,500,000.
7.2. LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Borrowers shall not, and shall not
permit their respective Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any property or asset
of any kind (including any document or instrument in respect of goods or
accounts receivable) of Borrowers or any of their respective Subsidiaries,
whether now owned or hereafter acquired, or any income or profits therefrom, or
file or authorize the filing of, or permit to remain in effect, any effective
financing
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statement or other similar notice of any Lien with respect to any such property,
asset, income or profits under the UCC or under any similar recording or notice
statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents to
secure the Obligations, the obligations of Borrowers under the Detroit
L/C Facility Documents, the obligations under the High Yield Notes and
the obligations to the cash management bank with respect to the Cash
Management System;
(iii) Liens existing on the Closing Date and described in
Schedule 7.2 annexed hereto;
(iv) Liens on assets of any Subsidiary of Company and/or on
the stock or other equity interests of such Subsidiary, in each case to
the extent such Liens secure Limited Recourse Debt of such Subsidiary
permitted by subsection 7.1(xi);
(v) Liens on assets of Company or any Subsidiary of Company
securing refinancing Indebtedness permitted by subsection 7.1(x),
provided, that in each case the Liens securing such refinancing
Indebtedness shall attach only to the assets that were subject to Liens
securing the Indebtedness so refinanced and, if applicable, assets the
acquisition of which was financed with the proceeds of such refinancing
Indebtedness permitted by subsection 7.1(x);
(vi) Liens securing debt service reserve funds, completion
obligations and similar accounts and obligations (other than
Indebtedness) of Subsidiaries of Company to Persons other than Company
and its Subsidiaries and their respective Affiliates, so long as (a)
each such obligation is associated with a Project, (b) such Lien is
limited to (1) assets associated with such Project (which in any event
shall not include assets held by any Borrower other than a Borrower
whose sole business is the ownership and/or operation of such Project
and substantially all of whose assets are associated with such Project)
and/or (2) the equity interests in such Subsidiary, but in the case of
clause (2) only if such Subsidiary's sole business is the ownership
and/or operation of such Project and substantially all of such
Subsidiary's assets are associated with such Project, and (c) such
obligation is otherwise permitted under this Agreement;
(vii) Liens on cash collateral of Subsidiaries of Company
securing Contingent Obligations permitted under subsection 7.4(ix), so
long as such cash is provided from funds that would not otherwise be
available (due to prohibitions in the underlying agreements relating to
Projects) for making dividends and distributions to Company and its
other Subsidiaries;
(viii) Liens on cash collateral of Subsidiaries of Company
securing Contingent Obligations permitted under subsection 7.4(x), so
long as such cash is provided from funds that would not otherwise be
available (due to prohibitions in the
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underlying agreements relating to Projects) for making dividends and
distributions to Company and its other Subsidiaries;
(ix) Liens on cash collateral of Company and its Subsidiaries
securing Contingent Obligations permitted under subsection 7.4(xi);
(x) Liens created pursuant to Insurance Premium Financing
Arrangements otherwise permitted under this Agreement, so long as such
Liens attach only to gross unearned premiums for the insurance
policies;
(xi) Liens on cash collateral of Company securing insurance
deductibles or self-insurance retentions required by third party
insurers in connection with insurance arrangements entered into by
Company and its Subsidiaries with such insurers in compliance with
subsection 6.4B;
(xii) Liens on all or substantially all of the assets of the
Bankrupt Subsidiaries to the extent such Liens secure the obligations
of such Bankrupt Subsidiaries under loans made to them and permitted
under subsection 7.3(xi);
(xiii) Liens securing Indebtedness permitted under subsection
7.1(ix)(b), so long as such Liens extend only to the assets subject to
the relevant Capital Lease;
(xiv) Liens on the Capital Stock of CPIH pledged by CEA under
the CPIH Stock Pledge Agreement; and
(xv) Other Liens on assets of any Subsidiary of Company
securing Indebtedness in an aggregate amount not exceeding $2,500,000.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If any Borrowers or any
of its Subsidiaries shall create or assume any Lien upon any of its properties
or assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A and Liens created or assumed on properties or
assets on which First Priority Liens created under the Collateral Documents are
attached and perfected at the time of such creation or assumption, the Borrowers
hereby agree that (i) they will be deemed to have automatically and without
further action secured the Obligations with such Lien equally and ratably with
any and all other Indebtedness, Contingent Obligations or any other obligations
or debt (as defined in the Bankruptcy Code) secured thereby, and (ii) they shall
take or cause to be taken such actions as Administrative Agent or Requisite
Lenders deem necessary or advisable to evidence such equal and ratable Lien;
provided, that notwithstanding the foregoing, this covenant shall not be
construed as a consent by Requisite Lenders to the creation or assumption of any
such Lien not permitted by the provisions of subsection 7.2A, and the creation
or assumption of any such Lien not permitted by the provisions of subsection
7.2A shall constitute an Event of Default.
C. NO FURTHER NEGATIVE PLEDGES. Neither Company nor any of its
Subsidiaries shall enter into any agreement (other than this Agreement, the
Credit Documents, the Detroit L/C Facility Documents and the High Yield
Indenture) on or after
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the Closing Date prohibiting the creation or assumption of any Lien upon any of
its properties or assets, whether now owned or hereafter acquired, except with
respect to (i) specific property encumbered by a Lien permitted hereunder to
secure payment of particular Indebtedness permitted to be incurred under
subsection 7.1(vii), 7.1(x) (but only to the extent that the Indebtedness being
refinanced was subject to a negative pledge on the same assets), 7.1(xi) or
7.1(xii) or a Lien permitted under subsection 7.2A(vi), 7.2A(vii), 7.2A(viii),
7.2A(ix), 7.2A(xi), 7.2A(xii) or 7.2A(xiv), or by a Lien permitted under
subsection 7.2A(xv) to the extent such Lien secures obligations permitted
hereunder that are incurred to finance the acquisition of such specific
property, (ii) specific property to be sold pursuant to an executed agreement
with respect to an Asset Sale which is permitted hereunder, (iii) specific
property that is leased pursuant to a lease permitted hereunder, (iv) provisions
in the principal lease, service and operating agreements pertaining to Projects
or the partnership and financing agreements relating to Projects, so long as in
each case such lease, service, operating, partnership or financing agreement is
an extension, renewal or replacement of such agreement in effect as of the
Closing Date, is otherwise permitted to be entered into hereunder and contains
no more restrictive provisions relating to prohibiting the creation or
assumption of any Lien upon the properties or assets of the relevant Subsidiary
than the lease, service, operating, partnership or financing agreement so
extended, renewed or replaced, and (v) provisions contained in any Detroit L/C
Facility Agreement described in and permitted under clause (ii) of the
definition of Detroit L/C Facility Agreement.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR
OTHER SUBSIDIARIES. Company will not, and will not permit any of its
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (i) pay dividends or make any other distributions on
any of such Subsidiary's capital stock owned by Company or any other Subsidiary
of Company, (ii) repay or prepay any Indebtedness owed by such Subsidiary to
Company or any other Subsidiary of Company, (iii) make loans or advances to
Company or any other Subsidiary of Company, or (iv) transfer any of its property
or assets to Company or any other Subsidiary of Company, except (a) as provided
in this Agreement or the other Credit Documents, (b) those encumbrances or
restrictions applicable to Subsidiaries of Company to the extent created under
documentation in existence on the Closing Date, under the Detroit L/C Facility
Documents or under the High Yield Indenture, (c) as may be provided in an
executed agreement with respect to an Asset Sale which is permitted hereunder,
and (d) provisions in the principal lease, service or operating agreements,
partnership agreements and financing agreements pertaining to Projects, so long
as such lease, service or operating agreements, partnership agreements and
financing agreements are extensions, renewals or replacements of such agreements
in effect as of the Closing Date, are otherwise permitted to be entered into
hereunder and in each case contain no more restrictive provisions relating to
the ability of the relevant Subsidiary to take the actions described in clauses
(i) through (iv) than the agreement so extended, renewed or replaced.
7.3. INVESTMENTS; ACQUISITIONS.
Borrowers shall not, and shall not permit their respective
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint
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Venture, or acquire, by purchase or otherwise, all or substantially all the
business, property or fixed assets of, or capital stock or other ownership
interest of any Person, or any division or line of business of any Person
except:
(i) Company and its Subsidiaries may make and own Investments
in Domestic Cash Equivalents and in such investments as are permitted
or imposed under the terms of any cash collateral or debt service
reserve agreement (including pursuant to the terms of any Project bond
indenture) permitted hereunder;
(ii) Borrowers may make and own additional equity Investments
in other Borrowers, so long as no such Investment shall be made by one
Borrower in another Borrower if (a) the latter is subject to
restrictions of the type described in subsection 7.2D more adverse than
restrictions of such type that are applicable to the Borrower making
such Investment, or (b) such Investment shall result in the obligee or
beneficiary of any Indebtedness or Contingent Obligation (other than
the Obligations) having greater recourse to assets for the payment or
collection of such Indebtedness or Contingent Obligation than such
obligee or beneficiary had immediately prior to such Investment; and
Subsidiaries that are not Borrowers may make and own additional equity
Investments in Borrowers other than Company, so long as no such
Investment shall be made if (a) the applicable Subsidiary is subject to
restrictions of the type described in subsection 7.2D more adverse than
restrictions of such type that are applicable to the applicable
Borrower, (b) such Investment shall result in the obligee or
beneficiary of any Indebtedness or Contingent Obligation (other than
the Obligations) of such Subsidiary having greater recourse to assets
for the payment or collection of such Indebtedness or Contingent
Obligation than such obligee or beneficiary had immediately prior to
such Investment, or (c) such Investment shall have any adverse effect
on the Collateral for the Obligations;
(iii) Company and its Subsidiaries may make intercompany loans
to the extent permitted under subsections 7.1(iii) and 7.1(vii);
(iv) Company and its Subsidiaries may make Consolidated
Facilities Capital Expenditures permitted by subsection 7.6;
(v) Company and its Subsidiaries may continue to own the
Investments owned by them on the Closing Date and described in Schedule
7.3(v) annexed hereto;
(vi) Company and its Subsidiaries may make Expansions which
Company and its Subsidiaries are committed as of the Closing Date to
make in those waste-to-energy Projects set forth in Schedule 7.3(vi)
annexed hereto; provided, that each such Investment (or commitment to
make the same) made in connection with such Projects shall be of a type
described on such Schedule and shall be in an amount not exceeding the
amount set forth on such Schedule;
(vii) Company and its Subsidiaries may make Expansions (and
may enter into contractual commitments to make such Investments) with
respect to existing
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waste-to-energy Projects to the extent such Expansions are publicly
financed, so long as (a) Company shall provide to Administrative Agent
reasonable prior advance written notice of each such Investment and
Expansion and copies of all material contracts or other agreements
being entered into in connection with such Investment and Expansion,
(b) such Expansion is not otherwise prohibited under this Agreement,
(c) such Expansions are required by the existing client (if such client
is a Government Authority) of the relevant Project and the amounts
required therefor are advanced to Company and its Subsidiaries or paid
directly by such client, and (d) such Investment (or such contractual
commitment, as the case may be) shall not breach any other provision of
this Agreement; provided, that after the occurrence and during the
continuation of an Event of Default, neither Company nor any of its
Subsidiaries shall enter into a contractual commitment for any such
Investment;
(viii) Company and its Subsidiaries may, after the Closing
Date, make and own Investments in any other Subsidiary of Company (to
the extent in existence on the Closing Date) the proceeds of which are
applied to working capital, maintenance, operation, payroll and other
liquidity requirements in the ordinary course of business of
Subsidiaries other than Borrowers; provided, that no such Investment
may be made at any time that Borrowers shall not be in compliance with
subsection 7.6E;
(ix) Company and its Subsidiaries may, after the Closing Date,
make and own Investments in any other Subsidiary of Company (to the
extent in existence on the Closing Date) the proceeds of which are
applied to Development Expenses; provided, that Development Expenses
for all Projects of Company's Subsidiaries at any time after the
Closing Date, net of any such Development Expenses that have
theretofore been reimbursed after the Closing Date by the client of the
relevant Project, shall not exceed on any date of determination an
amount equal to (a) $3,000,000 plus (b) the product of $3,000,000
multiplied by the number of Fiscal Years that have commenced following
January 31, 2004 but prior to such date of determination;
(x) Borrowers and their Subsidiaries may own Investments in
the form of non-cash consideration received in connection with (a)
Asset Sales permitted under subsection 7.7(iii) or 7.7(iv) or (b)
settlements of disputes, to the extent such settlements occur in the
ordinary course of business;
(xi) Company and its Subsidiaries may make Investments after
the Closing Date consisting of intercompany loans to the Bankrupt
Subsidiaries, so long as (a) the proceeds of such loans are applied to
working capital, maintenance, operation, payroll and other liquidity
requirements in the ordinary course of business of such Bankrupt
Subsidiaries, (b) the aggregate amount of such intercompany loans
outstanding to the Bankrupt Subsidiaries at any time shall not exceed
$2,000,000, (c) such loans shall have, pursuant to an order of the
Bankruptcy Court in form and substance satisfactory to Administrative
Agent, no less favorable payment priority and lien priority than the
payment priority and lien priority of such Bankrupt Subsidiaries'
obligations under the DIP Credit Agreement immediately prior to the
Closing Date, and shall be secured by
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substantially the same assets of such Bankrupt Subsidiary as such
obligations under the DIP Credit Agreement immediately prior to the
Closing Date, and (d) such loans shall be evidenced by promissory notes
that shall be pledged to secure the Obligations;
(xii) Borrowers may make payments to the extent contractually
obligated pursuant to the terms of the Existing IPP International
Project Guaranties;
(xiii) Subject to the Intercreditor Agreement, Borrowers may
reimburse drawings made under Letters of Credit issued hereunder that
support obligations with respect to the IPP International Business; and
(xiv) CEA may make payments on account of Indebtedness of CPIH
to the extent such payments are made solely from the proceeds of sales
of Capital Stock of CPIH.
7.4. CONTINGENT OBLIGATIONS; PERFORMANCE GUARANTIES.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation or Performance Guaranty, and shall not
create or become or remain liable with respect to any obligation to incur a
subsequent Contingent Obligation or to post cash collateral to secure any
obligation, except:
(i) Borrowers may become and remain liable (a) with respect to
Contingent Obligations in respect of the Obligations and under the
Credit Documents, (b) with respect to Contingent Obligations under
guarantees of the High Yield Notes, and (c) with respect to Contingent
Obligations under the Detroit L/C Facility Documents and the CPIH Stock
Pledge Agreement;
(ii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of Letters of Credit;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of customary
and appropriate indemnification and purchase price adjustment
obligations incurred in connection with Asset Sales or other sales of
assets to the extent such Asset Sales and sales are permitted under
this Agreement;
(iv) Company and its Subsidiaries may become and remain liable
with respect to (a) Performance Guaranties in existence on the Closing
Date and described on Schedule 7.4(iv) annexed hereto, (b) Performance
Guaranties replacing, renewing or extending Performance Guaranties
described in clause (a), and (c) Performance Guaranties entered into in
connection with a Bankrupt Subsidiary ceasing to be a Bankrupt
Subsidiary, for the purpose of replacing a Performance Guaranty
relating to such Bankrupt Subsidiary that was in effect immediately
prior to the Closing Date but was terminated on the Closing Date, so
long as no Persons enter into any such
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replacement Performance Guaranty as obligors other than the obligors
under the Performance Guaranty being so replaced; provided, that no
such replacement, renewed or extended Performance Guaranty referred to
in clause (b) or (c) (x) taken as a whole (considering the economic
benefits and disadvantages to Company and its Subsidiaries from such
replacement, renewal or extension, as well as the economic benefits and
disadvantages to Company and its Subsidiaries of the Project to which
such Performance Guaranty relates), shall be more disadvantageous in
any material respect to Company and its Subsidiaries than the
Performance Guaranty so replaced, renewed or extended or (y) shall be
secured or guarantied;
(v) Company and its Subsidiaries may become and remain liable
with respect to Performance Guaranties or Contingent Obligations
supporting Expansions of waste-to-energy Projects permitted pursuant to
subsection 7.3(vii), provided, that (a) the terms of any such
Performance Guaranty or Contingent Obligation shall be generally
consistent with past practice of Company and its Subsidiaries, (b) in
no event shall any such Performance Guaranty or Contingent Obligation
be secured by collateral, (c) no Borrower or Subsidiary other than a
Person already liable under a substantially similar Contingent
Obligation with respect to such Project shall become liable under any
such Contingent Obligation, (d) no Borrower or Subsidiary other than a
Person already liable under a substantially similar Performance
Guaranty with respect to such Project shall become liable under any
such Performance Guaranty, and (e) after the occurrence and during the
continuation of an Event of Default, neither Company nor any if its
Subsidiaries shall enter into any such Performance Guaranty or
Contingent Obligation or enter into a contractual commitment to provide
any such Performance Guaranty or Contingent Obligation;
(vi) Company and its Subsidiaries, as applicable, may become
and remain liable with respect to (a) Contingent Obligations (other
than the Existing IPP International Project Guaranties) in existence on
the Closing Date and described in Schedule 7.4(vi) annexed hereto, and
(b) Contingent Obligations replacing, renewing or extending Contingent
Obligations described in clause (a); provided, that no such
replacement, renewed or extended Contingent Obligation, taken as a
whole, shall be more disadvantageous in any material respect to Company
and its Subsidiaries than the Contingent Obligations so replaced,
renewed or extended;
(vii) Company and its Subsidiaries may become and remain
liable with respect to usual and customary Contingent Obligations
incurred in connection with arrangements made with third parties to
obtain surety bonds, bid bonds and other similar security required to
be delivered or posted in connection with (i) additions or improvements
to existing facilities to increase the capacity, efficiency,
performance or profitability of the applicable Project, so long as such
additions or improvements are not Expansions, are required pursuant to
binding Contractual Obligations of Company or its Subsidiaries and are
in compliance with subsection 7.6F, and (ii) Expansions of existing
Projects, to the extent such Expansions are otherwise permitted under
subsection 7.3(vii) and the other provisions of this Agreement;
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(viii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations which Company and its
Subsidiaries are contractually committed as of the Closing Date to
incur with respect to those Projects set forth on Schedule 7.3(vi)
annexed hereto; provided, that each such Contingent Obligation (or
commitment to incur the same) incurred in connection with such Projects
shall be of a type described on such Schedule and shall be in an amount
not exceeding the amount set forth on such Schedule;
(ix) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations consisting of long-term or
forward purchase contracts and option contracts to buy, sell or
exchange commodities and similar agreements or arrangements, so long as
such contracts, agreements or arrangements do not constitute
Commodities Agreements;
(x) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations constituting Hedge Agreements;
(xi) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations incurred in exchange (or in
consideration) for (a) the release of cash collateral pledged by
Company or its Subsidiaries or (b) the return and cancellation of
undrawn letters of credit for which Company or its Subsidiaries are
liable for reimbursement; provided, that in each case the maximum
amount of the Contingent Obligations so incurred shall not exceed 110%
of the amount of cash collateral released or the face amount of the
letters of credit returned and cancelled, as the case may be;
(xii) Company and its Subsidiaries may become and remain
liable with respect to usual and customary Contingent Obligations
incurred in connection with insurance deductibles or self-insurance
retentions required by third party insurers in connection with
insurance arrangements entered into by Company and its Subsidiaries
with such insurers in compliance with subsection 6.4B; and
(xiii) Company and its Subsidiaries, as applicable, may remain
liable with respect to the Existing IPP International Project
Guaranties, as such guaranties are in effect on the Closing Date.
7.5. RESTRICTED PAYMENTS.
Borrowers shall not, and shall not permit their respective
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Payment; provided, however, that (i) so long as no
Event of Default shall have occurred and be continuing, Borrowers may make
regularly scheduled payments of principal and interest in respect of any
Subordinated Indebtedness (other than the Tax Note) in accordance with the terms
of, and only to the extent required by, and subject to the subordination
provisions contained in, the indenture or other agreement pursuant to which such
Subordinated Indebtedness was issued, as such indenture or other agreement may
be amended from time to
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time to the extent permitted under subsection 7.12, provided, that so long as
Borrowers may elect to pay all or any portion of such interest in kind rather
than in cash, Borrowers shall elect to pay in kind the maximum portion of such
interest with respect to which Borrowers can make such election; (ii) Company
and its Subsidiaries may make payments of principal, interest and other amounts
in respect of the Tax Note and Indebtedness permitted under subsections 7.1(vi),
7.1(ix), 7.1(x), 7.1(xi), 7.1(xii), 7.1(xiv) and 7.1(xviii), in accordance with
the terms of, and only to the extent required by, the Tax Note or the indentures
or other agreements pursuant to which such Indebtedness was issued, as the case
may be, as such Tax Note, indentures or other agreements may be amended from
time to time to the extent permitted hereunder, provided, however, that during
the continuance of an Event of Default, notwithstanding anything to the contrary
in this Agreement, neither Company nor any Subsidiary shall fund, contribute or
otherwise advance amounts for payment of Indebtedness permitted under
subsections 7.1(vi), 7.1(x) and 7.1(xi) related to Projects unless it has an
irrevocable Contractual Obligation to make such payments; (iii) so long as no
Event of Default shall have occurred and be continuing, Subsidiaries of Company
may, at the time Indebtedness is refinanced or replaced as permitted under
subsection 7.1 by other Indebtedness permitted under such subsection, pay
principal, accrued interest and other amounts owing on such refinanced
Indebtedness at such time, provided, that such payments may be made with respect
to Limited Recourse Debt during the continuance of an Event of Default so long
as such payments are from the proceeds of Limited Recourse Debt permitted to be
incurred hereunder and such proceeds are required to be applied to make such
payments under a binding Contractual Obligation to a third party; (iv) Company
and its Subsidiaries may pay any fees required to be paid to Administrative
Agent and Lenders hereunder; (v) so long as no failure to pay any amount when
due shall have occurred and be continuing under this Agreement, Company may make
payments to DHC to the extent required under the Corporate Services
Reimbursement Agreement; (vi) Company and its Subsidiaries may make payments
required under the DHC Tax Sharing Agreement; (vii) Company and its Subsidiaries
may make payments to Persons in accordance with the Approved Plan of
Reorganization to the extent such payments are made from funds held in reserves
established pursuant to the Approved Plan of Reorganization, provided, that
Borrowers shall not, and shall not permit their respective Subsidiaries to,
deposit any amounts in such reserves in excess of the amounts established prior
to the Closing Date pursuant to the Approved Plan of Reorganization and (viii)
Company and its Subsidiaries may apply cash in an amount not exceeding, in the
aggregate, 105% of the stated amount of the Greenway L/C to cash collateralize
or otherwise support the Greenway L/C as contemplated under subsection
4.1F(i)(d) and/or to reimburse drawings thereunder.
In addition, in any case where a Borrower or Subsidiary is a
Joint Venture, Borrowers shall not, and shall not permit their respective
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for (a) any dividend or other distribution, direct or indirect, on
account of any shares of Capital Stock of such Joint Venture held by Persons
other than Borrowers or any Subsidiaries of Borrowers, except a dividend payable
solely in shares of that class of stock to the holders of that class, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of Capital Stock of
such Joint Venture held by Persons
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other than Borrowers or any Subsidiaries of Borrowers, or (c) any payment made
to retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of Capital Stock of such Joint Venture held by
Persons other than Borrowers or any Subsidiaries of Borrowers, except in each
case to the extent the relevant action described in clause (a), (b) or (c) is
required pursuant to a binding Contractual Obligation in effect as of the
Closing Date or pursuant to an extension, renewal or replacement of such a
Contractual Obligation so long as such extension, renewal or replacement is
otherwise permitted to be entered into hereunder and contains provisions no less
favorable to Company and its Subsidiaries than the relevant Contractual
Obligations so extended, renewed or replaced.
7.6. FINANCIAL COVENANTS.
A. MINIMUM INTEREST COVERAGE RATIO. Company shall not permit
the ratio of (i) Adjusted EBITDA to (ii) Consolidated Cash Interest Expense, in
each case for any four-Fiscal Quarter period ending at the end of any Fiscal
Quarter set forth below, to be less than the correlative ratio indicated:
[Download Table]
MINIMUM INTEREST
FISCAL QUARTER COVERAGE RATIO
---------------- ----------------
FQ2 2004 1.15:1.00
FQ3 2004 1.15:1.00
FQ4 2004 1.15:1.00
FQ1 2005 1.15:1.00
FQ2 2005 1.20:1.00
FQ3 2005 1.20:1.00
FQ4 2005 1.25:1.00
FQ1 2006 1.25:1.00
FQ2 2006 1.30:1.00
FQ3 2006 1.30:1.00
FQ4 2006 1.30:1.00
FQ1 2007 1.30:1.00
FQ2 2007 1.35:1.00
FQ3 2007 1.35:1.00
FQ4 2007 1.35:1.00
FQ1 2008 1.35:1.00
FQ2 2008 1.40:1.00
FQ3 2008 1.40:1.00
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[Download Table]
MINIMUM INTEREST
FISCAL QUARTER COVERAGE RATIO
---------------- ----------------
FQ4 2008 and thereafter 1.40:1.00
B. MAXIMUM CONSOLIDATED LEVERAGE RATIO. Company shall not
permit the Consolidated Leverage Ratio as at any date on or after the end of the
most recently ended Fiscal Quarter set forth in the table below to exceed the
correlative ratio indicated:
[Download Table]
MAXIMUM CONSOLIDATED
FISCAL QUARTER LEVERAGE RATIO
---------------- --------------------
FQ2 2004 7.00:1.00
FQ3 2004 7.00:1.00
FQ4 2004 7.00:1.00
FQ1 2005 7.00:1.00
FQ2 2005 6.75:1.00
FQ3 2005 6.75:1.00
FQ4 2005 6.50:1.00
FQ1 2006 6.50:1.00
FQ2 2006 6.25:1.00
FQ3 2006 6.25:1.00
FQ4 2006 6.25:1.00
FQ1 2007 6.25:1.00
FQ2 2007 6.00:1.00
FQ3 2007 6.00:1.00
FQ4 2007 6.00:1.00
FQ1 2008 6.00:1.00
FQ2 2008 5.75:1.00
FQ3 2008 5.75:1.00
FQ4 2008 and thereafter 5.75:1.00
C. MINIMUM CONSOLIDATED NET WORTH. Company shall not permit
Consolidated Net Worth on any date of determination after the Closing Date to be
less than (i) Consolidated Net Worth as of the Closing Date, if such date of
determination occurs during 2004, or (ii) the sum of (a) Consolidated Net Worth
as of the Closing Date plus (b) the product of $7,000,000 multiplied by the
number of Fiscal Quarters that have ended
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after December 31, 2004 but prior to such date of determination, if such date of
determination occurs after 2004.
D. MINIMUM ADJUSTED EBITDA. Company shall not permit Adjusted
EBITDA for any four-Fiscal Quarter period ending at the end of any Fiscal
Quarter set forth below to be less than the correlative amount indicated:
[Download Table]
MINIMUM ADJUSTED
FISCAL QUARTER EBITDA
-------------- ----------------
FQ2 2004 $40,000,000
FQ3 2004 $40,000,000
FQ4 2004 $40,000,000
FQ1 2005 $40,000,000
FQ2 2005 $40,000,000
FQ3 2005 $40,000,000
FQ4 2005 $45,000,000
FQ1 2006 $45,000,000
FQ2 2006 $45,000,000
FQ3 2006 $45,000,000
FQ4 2006 $45,000,000
FQ1 2007 $45,000,000
FQ2 2007 $45,000,000
FQ3 2007 $45,000,000
FQ4 2007 $45,000,000
FQ1 2008 $45,000,000
FQ2 2008 $45,000,000
FQ3 2008 $45,000,000
FQ4 2008 and thereafter $45,000,000
E. MINIMUM NON-BORROWER CASH FLOW. Company shall not permit
Non-Borrower Cash Flow for any four-Fiscal Quarter period ending at the end of
any Fiscal Quarter, to be less than zero.
F. MAXIMUM CONSOLIDATED FACILITIES CAPITAL EXPENDITURES.
Borrowers shall not, and shall not permit their respective Subsidiaries to, make
or incur Consolidated Facilities Capital Expenditures during any Fiscal Year in
excess of the Maximum Consolidated Facilities Capital Expenditures Amount for
such Fiscal Year. For purposes of
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this subsection 7.6F, the "MAXIMUM CONSOLIDATED FACILITIES CAPITAL EXPENDITURES
AMOUNT" for Fiscal Year 2004 shall equal $25,000,000 and for each Fiscal Year
thereafter shall equal $20,000,000; provided, however, that the Maximum
Consolidated Facilities Capital Expenditures Amount for any Fiscal Year after
2004 shall be increased by an amount equal to 25% of the excess, if any, of the
Maximum Consolidated Facilities Capital Expenditures Amount for the previous
Fiscal Year (prior to giving effect to this proviso) over the actual amount of
Consolidated Facilities Capital Expenditures made or incurred during such
previous Fiscal Year; and provided further, however, that Company may elect by
written notice to Administrative Agent to increase the Maximum Consolidated
Facilities Capital Expenditures Amount for any Fiscal Year by an amount not more
than $5,000,000 by decreasing the Maximum Consolidated Facilities Capital
Expenditures Amount for the subsequent Fiscal Year by an amount equal to the
amount of such increase.
G. CERTAIN CALCULATIONS. Notwithstanding any provision of this
Agreement to the contrary, (i) for purposes of calculating Adjusted EBITDA for
any four-Fiscal Quarter period ending prior to the first Fiscal Quarter of 2005,
Adjusted EBITDA for the third and fourth Fiscal Quarters of 2003 and the first
Fiscal Quarter of 2004 shall be deemed to be equal to the correlative amounts
set forth opposite such Fiscal Quarters on Schedule 7.6G annexed hereto; and
(ii) for purposes of determining compliance with subsection 7.6A for any
four-Fiscal Quarter period ending prior to the last Fiscal Quarter of 2004,
Consolidated Cash Interest Expense shall equal the product of (a) actual
Consolidated Cash Interest Expense during the period from the Closing Date to
the end of such four-Fiscal Quarter period multiplied by (b) the ratio of (1)
365 divided by (2) the number of days in such period; and (iii) for purposes of
determining compliance with each of the covenants in this subsection 7.6, each
of Adjusted EBITDA, Consolidated Cash Interest Expense, Consolidated Net Worth,
Non-Borrower Cash Flow and Consolidated Facilities Capital Expenditures shall
not include any portion thereof attributable to the results of operations or
financial position, as the case may be, of CPIH Subsidiaries for the relevant
period or as of the relevant date of determination.
7.7. RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES.
Borrowers shall not, and shall not permit their respective
Subsidiaries to, alter the legal form of organization of Company or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),
transfer or otherwise dispose of (including by discount or compromise), in one
transaction or a series of transactions, all or any part of its business,
property or assets (including its notes or receivables and Capital Stock of a
Subsidiary, whether newly issued or outstanding) or its interests in or claims
against any Project, in each case whether now owned or hereafter acquired,
except:
(i) any Borrower may be merged with or into a Borrower, or be
liquidated, wound up or dissolved, or all or any part of its business,
property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions,
to a Borrower; provided, that no such transaction shall result in
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the obligee or beneficiary of any Indebtedness or Contingent Obligation
(other than the Obligations) having greater recourse to assets or
Persons for the payment or collection of such Indebtedness or
Contingent Obligation than such obligee or beneficiary had immediately
prior to such transaction;
(ii) (a) any Subsidiary of Company that is not a Borrower may
be merged with or into any other Subsidiary of Company that is not a
Borrower, or be liquidated, wound up or dissolved, or all or any part
of its business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions, to another Subsidiary that is not a Borrower, provided,
that no such transaction shall result in the obligee or beneficiary of
any Indebtedness or Contingent Obligation (other than the Obligations)
having greater recourse to assets or Persons for the payment or
collection of such Indebtedness or Contingent Obligation than such
obligee or beneficiary had immediately prior to such transaction; and
(b) any Immaterial Foreign Subsidiary may be merged with or into any
Borrower, or be liquidated, wound up or dissolved, or all or any part
of its business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions, to a Borrower, provided, that (1) no such transaction
shall result in the obligee or beneficiary of any Indebtedness or
Contingent Obligation (other than the Obligations) of such Immaterial
Foreign Subsidiary having greater recourse to assets or Persons for the
payment or collection of such Indebtedness or Contingent Obligation
than such obligee or beneficiary had immediately prior to such
transaction and (2) the relevant Borrower shall be a surviving entity
in any such transaction;
(iii) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided, that the consideration received for such assets shall be in
an amount at least equal to the fair market value thereof; and
(iv) Company and its Subsidiaries may make Asset Sales,
provided, that (a) the consideration received for such assets shall be
in an amount at least equal to the fair market value thereof; (b) not
less than 90% of the consideration received (other than any
consideration consisting of the assumption of liabilities related to
such assets) in any such Asset Sale shall be cash (it being agreed that
cash the receipt of which may by the relevant terms of such Asset Sale
be deferred more than six months after the date of consummation of such
Asset Sale shall not be considered cash for purposes of this clause
(b)); (c) not more than 10% of the cash consideration received by
Company and its Subsidiaries in any such Asset Sale shall be received
after the date of consummation of such Asset Sale; (d) any Indebtedness
in relation to the assets sold in any such Asset Sale shall be repaid
and the related letters of credit shall be cancelled and returned to
the issuers thereof; (e) the Net Asset Sale Proceeds of such Asset
Sales shall be applied as Mandatory Payments to the extent required
under subsection 2.4A; and (f) in the event that the Net Asset Sale
Proceeds from any Asset Sale, when added to the aggregate Net Asset
Sale Proceeds from all other Asset Sales after the Closing Date, would
exceed $10,000,000, Company and its Subsidiaries
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shall not be permitted to consummate such Asset Sale without the prior
written consent of Requisite Lenders.
7.8. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any holder of 5% or more of any class of
equity Securities of Company or with any Affiliate of Company or of any such
holder, on terms that are less favorable to Company or that Subsidiary, as the
case may be, than those that might be obtained at the time from Persons who are
not such a holder or Affiliate; provided, that the foregoing restriction shall
not apply to (i) any Indebtedness permitted under subsection 7.1 among Company
and its Subsidiaries or among Subsidiaries of Company, (ii) reasonable and
customary salaries and fees paid to current officers and members of the
Governing Bodies of Company and its Subsidiaries, provided, that such salary and
fee arrangements are entered into at arms' length and on terms that are no less
favorable to Company or that Subsidiary, as the case may be, than those that
would have been obtained at the relevant time from Persons who are not such a
holder or Affiliate, (iii) reasonable and customary indemnifications and
insurance arrangements for the benefit of Persons that are officers or members
of the Governing Bodies of Company and its Subsidiaries on or after the Closing
Date, whether such Persons are current or former officers or members at the time
such indemnifications or arrangements are entered into, provided, that such
indemnifications and arrangements are entered into at arms' length and on terms
that are no less favorable to Company or that Subsidiary, as the case may be,
than those that would have been obtained at the relevant time from Persons who
are not such a holder or Affiliate, (iv) any employment agreements or benefits
arrangements entered into on or after the Closing Date by Company and its
Subsidiaries with employees at arms' length and on terms that are no less
favorable to Company or that Subsidiary, as the case may be, than those that
would have been obtained at the relevant time from Persons who are not such a
holder or Affiliate, (v) payments (and other transactions) made in accordance
with the terms of the Management Services and Reimbursement Agreement, the DHC
Tax Sharing Agreement, the Corporate Services Reimbursement Agreement and the
other Related Agreements, (vi) transactions occurring on the Closing Date and
described on Schedule 7.8 annexed hereto, and (vii) the payment of reasonable
legal fees and expenses incurred by law firms in which Directors of Company are
affiliated for services rendered to Company and its Subsidiaries.
7.9. RESTRICTION ON LEASES.
Borrowers shall not, and shall not permit any of their
Subsidiaries to, become liable in any way, whether directly by assignment or as
a guarantor or other surety, for the obligations of the lessee under any lease
for equipment (other than intercompany leases between Borrowers), unless,
immediately after giving effect to the incurrence of liability with respect to
such lease, the aggregate amount of all rents paid or payable by Company and its
Subsidiaries on a consolidated basis under all such leases entered into after
the Closing Date at the time in effect during the then current Fiscal Year or
any future period of 12
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consecutive calendar months shall not exceed $3,000,000; provided, however, that
this subsection 7.9 shall not prohibit Company or its Subsidiaries from
incurring obligations pursuant to the renewal, extension or replacement of
leases in effect at the Closing Date so long as such leases as renewed, extended
or replaced are not more disadvantageous in any material respect to Company and
its Subsidiaries and the Lenders than the leases so renewed, extended or
replaced.
7.10. [Intentionally Omitted]
7.11. CONDUCT OF BUSINESS.
From and after the Closing Date, Company shall not, and shall
not permit any of its Subsidiaries, to engage in any business other than the
energy, water and waste management businesses of the type in which they are
engaged on the Closing Date and other activities to the extent incidental or
reasonably related to such businesses.
7.12. AMENDMENTS TO RELATED AGREEMENTS, DEBT DOCUMENTATION AND
ORGANIZATIONAL DOCUMENTS.
Company shall not, and shall not permit any of its
Subsidiaries to, amend, restate, modify or waive (or make any payment consistent
with an amendment, restatement, modification or waiver of) any material
provision of (i) the Management Services and Reimbursement Agreement or the
other Related Agreements (other than the Detroit L/C Facility Documents), in
each case if the effect of such amendment, restatement, modification or waiver,
together with all other amendments, restatements, modifications or waivers made,
(a) except as otherwise permitted under subsection 7.1(xiii), is to impose
additional material obligations on, or confer material additional rights to the
holders thereof (or to other obligees with respect thereto) against, Company or
any of its Subsidiaries, or (b) is otherwise adverse to the interests of the
Lenders in a manner deemed material in the judgment of Administrative Agent;
(ii) the Organizational Documents of Company and its Subsidiaries, if the effect
of such amendment, restatement, modification or waiver, together with all other
amendments, restatements, modifications or waivers made, is adverse to the
interests of the Lenders in a manner deemed material in the judgment of
Administrative Agent; (iii) the Subordinated Indebtedness, if the effect thereof
would be to (a) change to earlier dates the dates on which any payments of
principal or interest are due thereon, (b) increase the interest rate, or the
portion thereof payable on a current basis in cash, applicable thereto, (c)
change any event of default with respect thereto in any manner adverse to the
interests of the Lenders, (d) change the redemption, prepayment or defeasance
provisions thereof, (e) change the subordination provisions thereof (or of any
guaranty thereof or intercreditor arrangement with respect thereto), (f) change
any collateral therefor (other than to release such collateral), or (g) change
any other term or provision thereof, if the effect of such change, together with
all other changes made, is to increase materially the obligations of the obligor
thereunder or to confer any additional rights on the holders of such
Indebtedness that would be materially adverse (in the judgment of Administrative
Agent or Requisite Lenders so notifying Administrative Agent or Company) to
Company, Administrative Agent or the Lenders, without the prior written consent
of Requisite Lenders; (iv) the principal documents relating
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to Limited Recourse Debt with respect to a Project if such amendment,
restatement, modification or waiver, together with all other amendments,
restatements, modifications and waivers made, would reasonably be expected to
have a Material Adverse Effect; or (v) the Detroit L/C Facility Documents,
unless (a) the terms of the Detroit L/C Facility Documents as so amended,
restated, modified or waived are not more disadvantageous to Company and its
Subsidiaries and the Lenders (in a manner deemed material by Administrative
Agent) than the Detroit L/C Facility Documents in effect on the Closing Date (it
being understood and agreed that any amendment, restatement, modification or
waiver having the effect of reducing, delaying or waiving any otherwise required
reduction in the amount of any commitment to extend letters of credit under the
Detroit L/C Facility Documents shall be deemed to be more disadvantageous for
purposes of this clause (a) without further notice or other action by
Administrative Agent), (b) the aggregate amount of Indebtedness and letters of
credit outstanding and additional Commitments to extend credit, if any, under
the Detroit L/C Facility Documents as so amended, restated, modified or waived,
do not exceed the aggregate amount of the commitments to extend credit in effect
under the Detroit L/C Facility Documents on the Closing Date (or, if less, the
amount of such commitments in effect immediately prior to such amendment,
restatement, modification or waiver), plus $5,000,000, (c) the credit available
under the Detroit L/C Facility Documents as so amended, restated, modified or
waived is limited to letters of credit issuable in connection with the Project
to which the Existing Detroit L/Cs relate (provided, that the requirements of
this clause (c) shall not apply with respect to credit extended pursuant to the
$5,000,000 additional amount described at the end of the foregoing clause (b)),
(d) the obligations under (and the Liens securing) the Detroit L/C Facility
Documents as so amended, restated, modified or waived are subject to the
Intercreditor Agreement on terms substantively identical to the terms applicable
to the obligations in effect under the Detroit L/C Facility Documents in effect
on the Closing Date, and (e) Company provides to Administrative Agent reasonable
prior advance written notice of such proposed amendment, restatement,
modification or waiver and copies of all material contracts or other agreements
being entered into in connection therewith).
7.13. END OF FISCAL YEARS; FISCAL QUARTERS.
Company shall not, and shall not permit any of its
Subsidiaries to change the end of the Fiscal Year of Company or any of its
Subsidiaries from December 31st.
7.14. AMENDMENT TO PENSION PLANS.
Borrowers shall not amend or modify any Pension Plan after the
Closing Date in any manner that results in or would reasonably be expected to
result in an increase in the amount of unfunded benefit liabilities (as such
unfunded benefit liabilities are determined in accordance with subsection 5.11D
hereof), unless such amendment or modification is required under applicable law.
SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("EVENT OF
DEFAULT") shall occur:
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8.1. FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Borrowers to pay the principal amount of any
Revolving Loan when due, whether at stated maturity, by acceleration, by notice
of voluntary prepayment, by mandatory prepayment or otherwise; failure by
Borrowers to pay when due any amount payable to Issuing Lender in reimbursement
of any drawing under a Letter of Credit; failure by Borrowers to pay any
Mandatory Payment when due; or failure by Borrowers to pay any interest or any
fee or any other amount due under this Agreement within 5 days after the date
due; or
8.2. DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries (other than
the Bankrupt Subsidiaries) to pay when due any principal of or interest
on or any other amount payable in respect of (a) the Detroit L/C
Facility Documents or the High Yield Notes, (b) any one or more items
of Indebtedness (other than Indebtedness referred to in subsection 8.1
or in clause (a) above or clause (c) below) or Contingent Obligations
or Performance Guaranties, in each case in the principal amount of
$5,000,000 or more, individually or in the aggregate, or (c) Limited
Recourse Debt of Subsidiaries of Company (other than the Bankrupt
Subsidiaries) in the principal amount of $10,000,000 or more,
individually or in the aggregate (provided, that Limited Recourse Debt
incurred in connection with one or more Projects to which less than
$2,000,000 in the aggregate of the operating income of Company and its
Subsidiaries (on a consolidated basis) is attributable for the 12-month
period immediately preceding the failure to pay such interest,
principal or other amounts shall not be considered Indebtedness or
Limited Recourse Debt solely for purposes of this clause (c)), in each
case beyond the end of any grace period provided therefor; or
(ii) breach or default by Company or any of its Subsidiaries
(other than the Bankrupt Subsidiaries) with respect to any other
material term of (a) the Detroit L/C Facility Documents, the High Yield
Indenture or the High Yield Notes, (b) one or more items of
Indebtedness (other than Limited Recourse Debt) or Contingent
Obligations in the individual or aggregate principal amounts referred
to in clause (i) above or (c) any loan agreement, mortgage, indenture
or other agreement relating to such item(s) of Indebtedness or
Contingent Obligation(s), if the effect of such breach or default is to
cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder or
holders) to cause, that Indebtedness or Contingent Obligation(s) to
become or be declared due and payable prior to its stated maturity or
the stated maturity of any underlying obligation, as the case may be
(upon the giving or receiving of notice, lapse of time, both, or
otherwise); or
8.3. BREACH OF CERTAIN COVENANTS.
Failure of any Borrower to perform or comply with any term or
condition contained in subsection 6.2 or Section 7 of this Agreement; or
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8.4. BREACH OF WARRANTY.
Any representation, warranty, certification or other statement
made by Company or any of its Subsidiaries in any Credit Document or in any
statement or certificate at any time given by Company or any of its Subsidiaries
in writing pursuant hereto or thereto or in connection herewith or therewith
shall be false in any material respect on the date as of which made; or
8.5. OTHER DEFAULTS UNDER CREDIT DOCUMENTS.
Any Credit Party shall default in the performance of or
compliance with any term contained in this Agreement or any of the other Credit
Documents, other than any such term referred to in any other subsection of this
Section 8, and such default shall not have been remedied or waived within 30
days after the earlier of (i) an Officer of Company or such Credit Party
becoming aware of such default or (ii) receipt by Company or such Credit Party
of notice from Administrative Agent or any Lender of such default; or
8.6. INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of DHC, Company or any of
Company's Subsidiaries (other than the Bankrupt Subsidiaries) in an
involuntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or
(ii) an involuntary case shall be commenced against DHC,
Company or any of Company's Subsidiaries (other than the Bankrupt
Subsidiaries) under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a
decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian
or other officer having similar powers over DHC, Company or any of
Company's Subsidiaries (other than the Bankrupt Subsidiaries), or over
all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim
receiver, trustee or other custodian of DHC, Company or any of
Company's Subsidiaries (other than the Bankrupt Subsidiaries) for all
or a substantial part of its property; or a warrant of attachment,
execution or similar process shall have been issued against any
substantial part of the property of DHC, Company or any of Company's
Subsidiaries (other than the Bankrupt Subsidiaries), and any such event
described in this clause (ii) shall continue for 60 days unless
dismissed, bonded or discharged; or
8.7. VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) DHC, Company or any of Company's Subsidiaries (other than
the Bankrupt Subsidiaries) shall have an order for relief entered with
respect to it or
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commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment
of or taking possession by a receiver, trustee or other custodian for
all or a substantial part of its property; or DHC, Company or any of
Company's Subsidiaries (other than the Bankrupt Subsidiaries) shall
make any assignment for the benefit of creditors; or
(ii) DHC, Company or any of Company's Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or the Governing
Body of DHC, Company or any of Company's Subsidiaries (other than the
Bankrupt Subsidiaries), or any committee thereof, shall adopt any
resolution or otherwise authorize any action to approve any of the
actions referred to in clause (i) above or this clause (ii); or
8.8. JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar
process involving (a) in any individual case an amount in excess of $5,000,000
or (b) in the aggregate at any time an amount in excess of $5,000,000 (in either
case not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Company or any of its Subsidiaries (other than the Bankrupt Subsidiaries) or any
of their respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 60 days (or in any event later than 5 days prior to the
date of any proposed sale thereunder); or
8.9. DISSOLUTION.
Any order, judgment or decree shall be entered against Company
or any of its Material Subsidiaries decreeing the dissolution or split up of
Company or that Subsidiary and such order shall remain undischarged or unstayed
for a period in excess of 30 days; or
8.10. EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events that individually
or in the aggregate result in or are reasonably be expected to result in
liability of Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in excess of $5,000,000 during the term of this Agreement; or there
shall exist as of January 1 of any year (based on, with respect to the Covanta
Energy Pension Plan, the actuarial valuation as of such January 1 and, with
respect to the SEIU Pension Plan, the actuarial valuation as of the immediately
preceding June 1), unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA, but determined on the basis of the actuarial assumptions
used for funding purposes with respect to a Pension Plan (as set forth in
Section 412 of the Internal Revenue Code, including, where applicable, the
interest rate assumptions set forth in Section 412(l) of the Internal Revenue
Code)), in the aggregate for all Pension Plans (excluding for purposes of
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such computation any Pension Plans with respect to which assets exceed benefit
liabilities), in excess of (i) $20,000,000, in the event Assumptions are
generally as favorable as the Assumptions used in the 2003 plan year valuations
with respect to such Pension Plans, or (ii) $26,000,000, in the event the
Assumptions are generally less favorable than the Assumptions used in the 2003
plan year valuations with respect to such Pension Plans; or
8.11. MATERIAL ADVERSE EFFECT.
Any event or change shall occur after the Closing Date that
has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect; or
8.12. CHANGE IN CONTROL.
A Change in Control shall have occurred; or
8.13. INVALIDITY OF INTERCREDITOR AGREEMENT; FAILURE OF SECURITY;
REPUDIATION OF OBLIGATIONS.
At any time after the execution and delivery thereof, (i) the
Intercreditor Agreement for any reason, other than the satisfaction in full of
all Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void, (ii) any
Collateral Document (with respect to the obligations thereunder of Company or
any Material Subsidiary (other than any Bankrupt Subsidiary)) shall cease to be
in full force and effect (other than by reason of a release of Collateral
thereunder in accordance with the terms hereof or thereof, the satisfaction in
full of the Secured Obligations or any other termination of such Collateral
Document in accordance with the terms hereof or thereof) or shall be declared
null and void, or Collateral Agent shall not have or shall cease to have a valid
and perfected Lien (with the priority set forth in subsection 5.15A) in any
Collateral purported to be covered thereby, in each case for any reason other
than the failure of Collateral Agent or any Lender to take any action within its
control, or (iii) any Credit Party shall contest the validity or enforceability
of any Credit Document in writing or deny in writing that it has any further
liability, including with respect to future advances by Lenders, under any
Credit Document to which it is a party; or
8.14. TERMINATION OF MATERIAL CONTRACTS.
Any Material Contract of the type described in clause (i) of
the definition of Material Contract, or any power purchase agreement to which
Company or any of its Subsidiaries is a party relating to a Project, shall be
terminated by Company or any of its Subsidiaries or by the counterparty or
counterparties thereto, if such termination is enforceable by Company, such
Subsidiary, or such counterparty or counterparties, unless (a) such Material
Contract is replaced within 10 days after such termination with a contract that
is reasonably acceptable to the Requisite Lenders and on substantially the same
economic terms as the relevant Material Contract being terminated, (b) the
Subsidiary of Company party to such Material Contract or power purchase
agreement, as the case may be, is a Bankrupt Subsidiary and such termination
would not reasonably be expected to have a
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Material Adverse Effect, or (c) the termination of such Material Contract occurs
pursuant to the exercise by the counterparty or counterparties thereto of a
contractual right to terminate such Material Contract for convenience and such
termination would not reasonably be expected to have a Material Adverse Effect;
or
8.15. NOL TREATMENT.
Any Capital Stock of Company of any of its Subsidiaries shall
be issued, or any equity contribution shall be made to Company or any of its
Subsidiaries, if (i) such issuance or equity contribution would reasonably be
expected to have a material adverse effect on the availability or accessibility
to Company and its Subsidiaries of the net operating losses disclosed to
Administrative Agent and Lenders prior to the Closing Date as being held by DHC,
or (ii) the proceeds of such issuance or equity contribution are applied to any
purpose prohibited under this Agreement:
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Revolving Loans, (b) an amount equal to 105% of the maximum amount that may at
any time be drawn under all Letters of Credit then outstanding (whether or not
any beneficiary under any such Letter of Credit shall have presented, or shall
be entitled at such time to present, the drafts or other documents or
certificates required to draw under such Letter of Credit), and (c) all other
Obligations shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by each Borrower, and obligation of Administrative Agent
and any Lender to make any Revolving Loan and the obligation of Issuing Lender
to issue, renew or extend any Letter of Credit shall thereupon terminate, and
(ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Borrowers, declare
all or any portion of the amounts described in clauses (a) through (c) above to
be, and the same shall forthwith become, immediately due and payable, and the
obligation of any Lender to make any Revolving Loan and the obligation of
Issuing Lender to issue, renew or extend any Letter of Credit hereunder shall
thereupon terminate.
Any amounts described in clause (b) above, when received by
Collateral Agent, shall be held by Collateral Agent pursuant to the terms of the
Security Agreement and shall be applied as therein provided (subject to the
terms of the Intercreditor Agreement).
Further upon the occurrence and during the continuance of any
Event of Default, subject to the Intercreditor Agreement, Administrative Agent
and Collateral Agent may, and upon the written request of Requisite Lenders
shall, (i) exercise all rights and remedies of Administrative Agent or
Collateral Agent set forth in any of the Collateral Documents, in addition to
all rights and remedies allowed by, the United States and of any state thereof,
including but not limited to the UCC, and (ii) revoke Borrowers' rights to use
cash collateral in which Administrative Agent or Collateral Agent has an
interest. The enumeration of the foregoing rights and remedies is not intended
to be exhaustive and the
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exercise of any right or remedy shall not preclude the exercise of any other
rights or remedies, all of which shall be cumulative and not alternative.
SECTION 9. ADMINISTRATIVE AGENT
9.1. APPOINTMENT.
A. APPOINTMENT OF ADMINISTRATIVE AGENT. Bank One is hereby
appointed Administrative Agent hereunder and under the other Credit Documents.
Each Lender hereby authorizes Administrative Agent to act as its agent in
accordance with the terms of this Agreement and the other Credit Documents.
Administrative Agent agrees to act upon the express conditions contained in this
Agreement and the other Credit Documents, as applicable. The provisions of this
Section 9 are solely for the benefit of Administrative Agent and Lenders and no
Credit Party shall have rights as a third party beneficiary of any of the
provisions thereof. In performing its functions and duties under this Agreement,
Administrative Agent (other than as provided in subsection 2.1E) shall act
solely as an agent of Lenders and does not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency or trust with or
for any Borrower or any other Credit Party.
B. CONTROL. Each Lender and Administrative Agent hereby
appoint each other Lender as agent for the purpose of perfecting Collateral
Agent's security interest in assets that, in accordance with the UCC, can be
perfected by possession or control.
9.2. POWERS AND DUTIES; GENERAL IMMUNITY.
A. POWERS; DUTIES SPECIFIED. Each Lender irrevocably
authorizes Administrative Agent to take such action on such Lender's behalf and
to exercise such powers, rights and remedies hereunder and under the other
Credit Documents as are specifically delegated or granted to Administrative
Agent by the terms hereof and thereof, together with such powers, rights and
remedies as are reasonably incidental thereto. Administrative Agent shall have
only those duties and responsibilities that are expressly specified in this
Agreement and the other Credit Documents. Administrative Agent may exercise such
powers, rights and remedies and perform such duties by or through its
Affiliates, agents or employees. Administrative Agent shall not have, by reason
of this Agreement or any of the other Credit Documents, a fiduciary relationship
in respect of any Lender or any Borrower; and nothing in this Agreement or any
of the other Credit Documents, expressed or implied, is intended to or shall be
so construed as to impose upon Administrative Agent any obligations in respect
of this Agreement or any of the other Credit Documents except as expressly set
forth herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. Administrative Agent
shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any other Credit Document or for any representations, warranties,
recitals or statements made herein or therein or made in any written or oral
statements or in any financial or other statements, instruments, reports or
certificates or any other documents furnished or made by Administrative Agent to
Lenders or by or on behalf of any Borrower to Administrative Agent or any Lender
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in connection with the Credit Documents and the transactions contemplated
thereby or for the financial condition or business affairs of Borrowers or any
other Person liable for the payment of any Obligations, nor shall Administrative
Agent be required to ascertain or inquire as to the performance or observance of
any of the terms, conditions, provisions, covenants or agreements contained in
any of the Credit Documents or as to the use of the proceeds of the Revolving
Loans or the use of the Letters of Credit or as to the existence or possible
existence of any Event of Default or Potential Event of Default. Anything
contained in this Agreement to the contrary notwithstanding, Administrative
Agent shall not have any liability arising from confirmations of the amount of
the Letter of Credit Usage or the component amounts thereof.
C. EXCULPATORY PROVISIONS. Neither Administrative Agent nor
any of its officers, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by Administrative Agent under or in connection
with any of the Credit Documents except to the extent caused by Administrative
Agent's gross negligence or willful misconduct. Administrative Agent shall be
entitled to refrain from any act or the taking of any action (including the
failure to take an action) in connection with this Agreement or any of the other
Credit Documents or from the exercise of any power, discretion or authority
vested in it hereunder or thereunder unless and until Administrative Agent shall
have received instructions in respect thereof from Requisite Lenders (or such
other Lenders as may be required to give such instructions under subsection
10.6) and, upon receipt of such instructions from Requisite Lenders (or such
other Lenders, as the case may be), Administrative Agent shall be entitled to
act or (where so instructed) refrain from acting, or to exercise such power,
discretion or authority, in accordance with such instructions. Without prejudice
to the generality of the foregoing, (i) Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any communication,
instrument or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and shall be entitled to rely
and shall be protected in relying on opinions and judgments of attorneys (who
may be attorneys for Company and its Subsidiaries), accountants, experts and
other professional advisors selected by it; and (ii) no Lender shall have any
right of action whatsoever against Administrative Agent as a result of
Administrative Agent acting or (where so instructed) refraining from acting
under this Agreement or any of the other Credit Documents in accordance with the
instructions of Requisite Lenders (or such other Lenders as may be required to
give such instructions under subsection 10.6).
D. ADMINISTRATIVE AGENT ENTITLED TO ACT AS LENDER. The agency
hereby created shall in no way impair or affect any of the rights and powers of,
or impose any duties or obligations upon, Administrative Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the
Revolving Loans and the Letters of Credit, Administrative Agent shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not performing the duties and functions delegated to it
hereunder, and the term "Lender" or "Lenders" or any similar term shall, unless
the context clearly otherwise indicates, include Administrative Agent in its
individual
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capacity. Administrative Agent and its Affiliates may accept deposits from, lend
money to, acquire equity interests in and generally engage in any kind of
commercial banking, investment banking, trust, financial advisory or other
business with Company or any of its Affiliates as if it were not performing the
duties specified herein, and may accept fees and other consideration from any
Borrower for services in connection with this Agreement and otherwise without
having to account for the same to Lenders.
9.3. INDEPENDENT INVESTIGATION BY LENDERS; NO RESPONSIBILITY FOR
APPRAISAL OF CREDITWORTHINESS.
Each Lender agrees that it has made its own independent
investigation of the financial condition and affairs of Company and its
Subsidiaries in connection with the making of the Revolving Loans and the
issuance of Letters of Credit hereunder and that it has made and shall continue
to make its own appraisal of the creditworthiness of Company and its
Subsidiaries. Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or any
such appraisal on behalf of Lenders or to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of any Revolving Loan or the issuance of any Letter of Credit
or at any time or times thereafter, and Administrative Agent shall not have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.
9.4. RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify Administrative Agent and its officers, directors, employees,
agents, attorneys, professional advisors and affiliates to the extent that any
such Person shall not have been reimbursed by Borrowers, for and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including counsel fees and disbursements and fees and
disbursements of any financial advisor engaged by Administrative Agent) or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against Administrative Agent or other such Persons in exercising
the powers, rights and remedies of Administrative Agent or performing duties of
Administrative Agent hereunder or under the other Credit Documents or otherwise
in its capacity as Administrative Agent in any way relating to or arising out of
this Agreement or the other Credit Documents; provided, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
Administrative Agent resulting from Administrative Agent's gross negligence or
willful misconduct. If any indemnity furnished to Administrative Agent or any
other such Person for any purpose shall, in the opinion of Administrative Agent,
be insufficient or become impaired, Administrative Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished.
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9.5. SUCCESSOR ADMINISTRATIVE AGENTS.
Administrative Agent may resign at any time by giving 30 days'
prior written notice thereof to Lenders and Borrowers, and Administrative Agent
may be removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to Borrowers and Administrative Agent and
signed by Requisite Lenders. If Bank One is an Issuing Lender, any such
resignation or removal of Bank One as Administrative Agent shall also constitute
its resignation or removal as Issuing Lender. Upon any such notice of
resignation or any such removal, Requisite Lenders shall have the right, upon 5
Business Days' notice to Borrowers, to appoint a successor Administrative Agent.
If, within 30 days after the date of Administrative Agent's notice of its
intention to resign, no successor Administrative Agent shall have been so
appointed by Requisite Lenders, then the Administrative Agent's resignation
shall become effective on such date without the need for any further action and
the Lenders shall be deemed to have been appointed as successor to
Administrative Agent hereunder and shall thereafter perform all of the duties of
Administrative Agent hereunder and/or under any other Credit Document until the
appointment by Requisite Lenders of such other successor Administrative Agent.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, including the Lenders as successor to
Administrative Agent (who shall be deemed to have accepted such appointment
pursuant to this subsection 9.5), such successor Administrative Agent shall
thereupon succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring or removed Administrative Agent (and, if
the removed Agent is an Issuing Lender, all the rights, powers, privileges and
duties of an Issuing Lender), the retiring or removed Administrative Agent shall
be discharged from its duties and obligations under this Agreement, and, if the
retiring or removed Agent is an Issuing Lender, such retiring or removed Issuing
Lender shall be discharged from its duties and obligations under this Agreement,
without any other or further act or deed on the part of such retiring or removed
Issuing Lender or any other Lender; provided, however, that the successor
Issuing Lender shall be obligated to issue Letters of Credit in substitution for
the Letters of Credit, if any, outstanding at the time of such succession or to
make other arrangements satisfactory to the retiring or removed Issuing Lender
to effectively assume the obligations of such retiring or removed Issuing Lender
with respect to such outstanding Letters of Credit, and such retiring or removed
Issuing Lender shall continue to have all rights of an Issuing Lender with
respect to such outstanding Letters of Credit until the cancellation or
expiration of such Letters of Credit and the reimbursement of any amounts drawn
thereunder. After any retiring or removed Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Credit
Documents.
9.6. INTERCREDITOR AGREEMENT.
Each Lender hereby further authorizes Administrative Agent, on
behalf of and for the benefit of Lenders, to enter into and to be the agent for
and representative of Lenders under the Intercreditor Agreement, and each Lender
agrees to be bound by the terms of the Intercreditor Agreement; provided, that
Administrative Agent shall not (i) enter into or
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consent to any material amendment, modification, termination or waiver of any
provision contained in the Intercreditor Agreement or (ii) release any
Collateral (except as otherwise expressly permitted or required pursuant to the
terms of this Agreement or the applicable Collateral Document), in each case
without the prior consent of Requisite Lenders (or, if required pursuant to
subsection 10.6, all Lenders). Anything contained in any of the Credit Documents
to the contrary notwithstanding, each Borrower, Administrative Agent and each
Lender hereby agree that (1) no Lender shall have any right individually to
realize upon any of the Collateral under any Collateral Document, it being
understood and agreed that all powers, rights and remedies under the Collateral
Documents may be exercised solely by Collateral Agent for the benefit of Secured
Parties in accordance with the terms thereof and of the Intercreditor Agreement,
and (2) in the event of a foreclosure by Collateral Agent on any of the
Collateral pursuant to a public or private sale, Administrative Agent or any
Lender may be the purchaser of any or all of such Collateral at any such sale
and Administrative Agent, as agent for and representative of Lenders (but not
any Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any Collateral payable by Administrative Agent at such sale.
9.7. ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to Company or any of the Subsidiaries of
Company, Administrative Agent (irrespective of whether any Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether Administrative Agent shall have made any demand on
Borrowers) shall be entitled and empowered, by intervention in such proceeding
or otherwise
(i) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of any Obligations
that are owing and unpaid and to file such other papers or documents as
may be necessary or advisable in order to have the claims of Lenders
and Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of Lenders and
Administrative Agent and their agents and counsel and all other amounts
due Lenders and Administrative Agent under subsections 2.2, 3.2 and
10.2) allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount
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due for the reasonable compensation, expenses, disbursements and advances of
Administrative Agent and their agents and counsel, and any other amounts due
Administrative Agent under subsections 2.3, 3.2 and 10.2.
Nothing herein contained shall be deemed to authorize
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lenders or to authorize
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
SECTION 10. MISCELLANEOUS
10.1. SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS IN
LETTERS OF CREDIT.
A. GENERAL. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of the parties hereto and the successors and assigns of Lenders (it
being understood that Lenders' rights of assignment are subject to the further
provisions of this subsection 10.1). Neither any Borrower's rights or
obligations hereunder nor any interest therein may be assigned or delegated by
any Borrower without the prior written consent of all Lenders (and any attempted
assignment or transfer by any Borrower without such consent shall be null and
void). No sale, assignment or transfer or participation of any Letter of Credit
or any participation therein may be made separately from a sale, assignment,
transfer or participation of a corresponding interest in the relevant Letter of
Credit Commitment of the Lender effecting such sale, assignment, transfer or
participation. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Affiliates of each of Administrative Agent and Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement. No Lender shall be permitted to assign any portion of its rights or
obligations hereunder to any other Person if, upon giving effect to such
assignment, Borrowers would be obligated to pay such assignee amounts greater
than the amounts, if any, which Borrowers would have been required to pay such
assigning Lender under subsection 2.4 if such assignment did not occur.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Any Lender may assign to
one or more Eligible Assignees all or any portion of its rights and
obligations under this Agreement; provided, that (a) except (1) in the
case of an assignment of the entire remaining amount of the assigning
Lender's rights and obligations under this Agreement or (2) in the case
of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund of a Lender, the aggregate amount of the Credit Exposure of the
assigning Lender and the assignee subject to each such assignment shall
not be less than $5,000,000, determined as of the date the Assignment
Agreement with respect to such assignment is delivered to
Administrative Agent or, if a trade date is specified in
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the Assignment Agreement, as of such trade date, unless Administrative
Agent otherwise consents, such consent not to be unreasonably withheld
or delayed, (b) such assignment shall consist of corresponding amounts
of the Letter of Credit Commitment of such Lender and the portion of
such Letter of Credit Commitment that is available for the making of
Revolving Loans (for example, if such assignment includes 20% of the
Letter of Credit Commitment of such Lender it shall also include 20% of
the portion of such Letter of Credit Commitment that is available for
the making of Revolving Loans), (c) the parties to each assignment
shall execute and deliver to Administrative Agent an Assignment
Agreement, together with a processing and recordation fee of $5,000,
and the Eligible Assignee, if it shall not be a Lender prior to such
assignment, shall deliver to Administrative Agent a counterpart to the
Intercreditor Agreement and such documents and information reasonably
requested by Administrative Agent, including such forms, certificates
or other evidence, if any, with respect to United States federal income
tax withholding matters as the assignee under such Assignment Agreement
may be required to deliver to Administrative Agent pursuant to
subsection 2.7B(iii), and no such assignment shall be effective unless
and until such Assignment Agreement is accepted by Administrative Agent
and recorded in the Register as provided in subsection 10.1B(ii), (d)
except in the case of an assignment to another Lender, Administrative
Agent and Issuing Lender shall have consented thereto (which consents
shall not be unreasonably withheld or delayed (it being understood that
nothing in this clause (c) shall affect the requirement that the
relevant assignee meet the requirements in the definition of Eligible
Assignee and any other applicable requirements of this Agreement)), (e)
no assignment by a Defaulting Lender shall be permitted unless such
Defaulting Lender or assignee has funded such Defaulting Lender's
defaulted funding obligations with respect to Revolving Loans and
participations in Letters of Credit and (f) unless an Event of Default
or Potential Event of Default then exists, Borrowers shall have
consented to any such assignment (such consent not to be unreasonably
withheld or delayed). Upon such execution, delivery and consent, from
and after the effective date specified in such Assignment Agreement,
(x) the assignee thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder have been assigned to it pursuant
to such Assignment Agreement, shall have the rights and obligations of
a Lender hereunder, (y) the assignee shall be a party to the
Intercreditor Agreement and, to the extent that rights and obligations
have been assigned to it pursuant to such Assignment Agreement, shall
have the rights and obligations of a "Creditor Party" thereunder (as
such term is defined in the Intercreditor Agreement) and (z) the
assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such
Assignment Agreement, relinquish its rights (other than any rights
which survive the termination of this Agreement under subsection 10.9B)
and be released from its obligations under this Agreement and the
Intercreditor Agreement (and, in the case of an Assignment Agreement
covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
subsection 10.9; provided, that anything contained in any of the Credit
Documents to
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the contrary notwithstanding (but subject to subsection 9.5), if such
Lender is the Issuing Lender such Lender shall continue to have all
rights and obligations of Issuing Lender with respect to any Letters of
Credit issued by it until the cancellation or expiration of such
Letters of Credit and the reimbursement of any amounts drawn
thereunder). The assigning Lender of any Revolving Loan Commitments
and/or Revolving Loans shall, upon the effectiveness of such assignment
or as promptly thereafter as practicable, surrender its Revolving
Notes, if any, to Administrative Agent for cancellation, and thereupon
new Revolving Notes shall, if so requested by the assignee and/or the
assigning Lender in accordance with subsection 2.1F, be issued to the
assignee and/or to the assigning Lender, substantially in the form of
Exhibit II annexed hereto, with appropriate insertions, to reflect the
new Revolving Loan Commitments and/or outstanding Revolving Loans, as
the case may be, of the assignee and/or the assigning Lender. Other
than as provided in subsection 10.5, any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not
comply with this subsection 10.1B shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights
and obligations in accordance with subsection 10.1C. Except as
otherwise provided in this subsection 10.1, no Lender shall, as between
Borrowers and such Lender, as between Agents and such Lender, or as
between Issuing Lender and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment or transfer
of, or any granting of participations in, all or any part of its Letter
of Credit Commitment, Letters of Credit or participations therein or
the other Obligations owed to such Lender.
(ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee and the processing and recordation fee referred to in
subsection 10.1B(i) and any forms, certificates or other evidence with
respect to United States federal income tax withholding matters that
such assignee may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii), Administrative Agent shall, if
Administrative Agent and Issuing Lenders have consented to the
assignment evidenced thereby (to the extent each such consent is
required pursuant to subsection 10.1B(i)), (a) accept such Assignment
Agreement by executing a counterpart thereof as provided therein (which
acceptance shall evidence any required consent of Administrative Agent
to such assignment), (b) record the information contained therein in
the Register, and (c) give prompt notice thereof to Company.
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection
10.1B(ii).
C. PARTICIPATIONS. Any Lender may, without the consent of, or
notice to, any Borrower or Administrative Agent, sell participations to one or
more Persons (other than a natural Person or any Borrower or any of its
Affiliates) in all or a portion of such Lender's rights and/or obligations under
this Agreement; provided, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
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responsible to the other parties hereto for the performance of such obligations
and (iii) Borrowers, Administrative Agent and Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided, that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
directly affecting (i) the extension of the Maturity Date or (ii) a reduction of
the principal amount of or the rate of interest payable on any Obligation
allocated to such participation. Subject to the further provisions of this
subsection 10.1C, each Borrower agrees that each Participant shall be entitled
to the benefits of subsections 2.6D and 2.7 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection 10.1B.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of subsection 10.4 as though it were a Lender, provided, such
Participant agrees to be subject to subsection 10.5 as though it were a Lender.
A Participant shall not be entitled to receive any greater payment under
subsections 2.6D and 2.7 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant unless the
sale of the participation to such Participant is made with Borrowers' prior
written consent. A Participant that would be a Non-US Lender if it were a Lender
shall not be entitled to the benefits of subsection 2.7.
D. PLEDGES AND ASSIGNMENTS. Any Lender may at any time pledge
or assign a security interest in all or any portion of the Obligations owed to
such Lender, to secure obligations of such Lender, including any pledge or
assignment to secure obligations to any Federal Reserve Bank; provided, that (i)
no Lender shall be relieved of any of its obligations hereunder as a result of
any such assignment or pledge and (ii) in no event shall any assignee or pledgee
be considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information
concerning Company and its Subsidiaries (including CPIH Subsidiaries) in the
possession of that Lender from time to time to assignees and participants
(including prospective assignees and participants), subject to subsection 10.20.
F. AGREEMENTS OF LENDERS. Each Lender listed on the signature
pages hereof hereby agrees, and each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree, (i) that it is an Eligible
Assignee described in clause (i) of the definition thereof; (ii) that it has
experience and expertise in the making or purchasing of loans such as the
Revolving Loans and in the funding of or purchasing participations of the type
purchased in the Letters of Credit; and (iii) that it will make or purchase
Revolving Loans and fund or purchase such participations for its own account in
the ordinary course of its business and without a view to distribution thereof
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of this
subsection 10.1, the disposition of such
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Revolving Loans or participations or any interests therein shall at all times
remain within its exclusive control).
G. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 10.1, any Lender may assign and pledge all or any portion of the
Obligations owed to such Lender hereunder to any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided, that (i) no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.
10.2. EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Borrowers agree, jointly and severally, to pay promptly (i) all the
actual and reasonable costs and expenses of negotiation, preparation and
execution of the Credit Documents and any consents, amendments, waivers or other
modifications thereto; (ii) all the costs of furnishing all opinions by counsel
for Credit Parties (including any opinions requested by Administrative Agent or
Lenders as to any legal matters arising hereunder) and of Borrowers' performance
of and compliance with all agreements and conditions on their part to be
performed or complied with under this Agreement and the other Credit Documents
including with respect to confirming compliance with environmental and insurance
requirements; (iii) the reasonable fees, expenses and disbursements of advisors
and counsel to Administrative Agent (including Goldberg, Kohn, Bell, Black,
Rosenbloom & Moritz, Ltd.) in connection with the negotiation, preparation,
execution, interpretation or administration of the Credit Documents and any
proposed consents, amendments, waivers or other modifications thereto and any
other documents or matters requested by any Borrower; (iv) all the actual costs
and reasonable expenses of creating and perfecting Liens in favor of Collateral
Agent on behalf of Secured Parties pursuant to any Collateral Document,
including filing and recording fees, expenses and taxes, stamp or documentary
taxes, search fees, title insurance premiums, and reasonable fees, expenses and
disbursements of counsel to Administrative Agent and Collateral Agent and of
counsel providing any opinions that Administrative Agent or Requisite Lenders
may request in respect of the Collateral Documents or the Liens created pursuant
thereto; (v) all the actual costs and reasonable fees, expenses and
disbursements of any auditors, accountants or appraisers and any environmental
or other consultants, advisors and agents employed or retained by Administrative
Agent or their counsel; (vi) all the actual costs and reasonable expenses
incurred in connection with the custody or preservation of any of the
Collateral; (vii) all other actual and reasonable costs and expenses incurred by
Administrative Agent in connection with the syndication of the Commitments; and
(viii) all the actual costs and reasonable expenses, including reasonable
attorneys' fees and costs of settlement, incurred by Administrative Agent,
Issuing Lender and Lenders in enforcing any Obligations of or in collecting any
payments due from any Credit Party hereunder or under the other Credit
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Documents (including in connection with the sale of, collection from, or other
realization upon any of the Collateral) or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to the Chapter 11 Cases or any other
insolvency or bankruptcy proceedings.
10.3. INDEMNITY.
In addition to the payment of expenses pursuant to subsection
10.2, whether or not the transactions contemplated hereby shall be consummated,
Borrowers jointly and severally agree to defend (subject to Indemnitees'
selection of counsel), indemnify, pay and hold harmless Administrative Agent,
Issuing Lender and Lenders, and the officers, directors, employees, agents and
affiliates of Administrative Agent, Issuing Lender and Lenders (collectively
called the "INDEMNITEES"), including Issuing Lenders, from and against any and
all Indemnified Liabilities (as hereinafter defined); provided, that Borrowers
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively,
any and all liabilities, obligations, losses, damages (including natural
resource damages), penalties, actions, judgments, suits, claims (including
Environmental Claims), costs (including the costs of any investigation, study,
sampling, testing, abatement, cleanup, removal, remediation or other response
action necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Credit Documents and the Chapter
11 Cases (it being understood that such Indemnified Liabilities arising out of
the Chapter 11 Cases shall apply solely to Indemnitees in their capacities as
Administrative Agent, Lenders and Issuing Lender or officers, directors,
employees, agents and affiliates of Administrative Agent, Lenders or Issuing
Lender, and not in any other capacities) or the transactions contemplated hereby
or thereby (including Lenders' agreement to make the Revolving Loans hereunder
or the use or intended use of the proceeds thereof or the issuance of Letters of
Credit hereunder or the use or intended use of any thereof, the failure of
Issuing Lender to honor a drawing under a Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
or de facto Government Authority, or any enforcement of any of the Credit
Documents (including any sale of, collection from, or other realization upon any
of the Collateral)), (ii) the statements contained in the commitment letter
delivered by any Lender with respect thereto, or (iii) any
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Environmental Claim or any Hazardous Materials Activity relating to or arising
from, directly or indirectly, any past or present activity, operation, land
ownership, or practice of Company or any of its Subsidiaries (including, solely
with respect to periods prior to the Closing Date, CPIH Subsidiaries).
To the extent that the undertakings to defend, indemnify, pay
and hold harmless set forth in this subsection 10.3 may be unenforceable in
whole or in part because they are violative of any law or public policy,
Borrowers shall contribute the maximum portion that they are permitted to pay
and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by Indemnitees or any of them.
10.4. SET-OFF.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default each Lender is
hereby authorized by each Borrower at any time or from time to time, without
notice to each Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other Indebtedness at any time held or owing by that Lender or any Affiliate
of such Lender to or for the credit or the account of any Borrower or any other
Credit Party against and on account of the obligations and liabilities of any
Borrower or any other Credit Party to that Lender (or any Affiliate of such
Lender) or to any other Lender (or any Affiliate of any other Lender) under this
Agreement, the Letters of Credit and participations therein and the other Credit
Documents, including all claims of any nature or description arising out of or
connected with this Agreement, the Letters of Credit and participations therein
or any other Credit Document, irrespective of whether or not (i) any Agent or
any Lender shall have made any demand hereunder or (ii) the principal of or the
interest on the Revolving Loans or any amounts in respect of the Letters of
Credit or any other amounts due hereunder shall have become due and payable
pursuant to Section 8 and although said obligations and liabilities, or any of
them, may be contingent or unmatured. Each Borrower hereby further grants to
Administrative Agent and each Lender a security interest in all deposits and
accounts maintained with Administrative Agent or such Lender as security for the
Obligations.
10.5. RATABLE SHARING.
A. Subject at all times to their obligations under the
Intercreditor Agreement, Lenders hereby agree among themselves that if any of
them shall, whether by voluntary payment or mandatory payment (other than a
payment or prepayment of the Revolving Loans made and applied in accordance with
the terms of this Agreement), by realization upon security, through the exercise
of any right of set-off or banker's lien, by counterclaim or cross action or by
the enforcement of any right under the Credit Documents or otherwise, or as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code, receive payment or reduction of a proportion of the aggregate amount of
principal, interest and other amounts payable in respect of Revolving Loans,
Letters of
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Credit, fees and other amounts then due and owing to that Lender hereunder or
under the other Credit Documents with respect to the Obligations (collectively,
the "AGGREGATE AMOUNTS DUE" to such Lender) that is greater than the proportion
received by any other Lender in respect of the Aggregate Amounts Due to such
other Lender, then the Lender receiving such proportionately greater payment
shall (i) notify Administrative Agent and each other Lender of the receipt of
such payment and (ii) apply a portion of such payment to purchase assignments
(which it shall be deemed to have purchased from each seller of an assignment
simultaneously upon the receipt by such seller of its portion of such payment)
of the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided, that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender, those purchases shall be rescinded and the purchase
prices paid for such assignments shall be returned to such purchasing Lender
ratably to the extent of such recovery, but without interest. Each Borrower
expressly consents to the foregoing arrangement and agrees that any purchaser of
an assignment so purchased may exercise any and all rights of a Lender as to
such assignment as fully as if that Lender had complied with the provisions of
subsection 10.1B with respect to such assignment. In order to further evidence
such assignment (and without prejudice to the effectiveness of the assignment
provisions set forth above), each purchasing Lender and each selling Lender
agree to enter into an assignment agreement at the request of a selling Lender
or a purchasing Lender, as the case may be, in form and substance reasonably
satisfactory to each such Lender and to Administrative Agent.
B. Notwithstanding anything in this subsection 10.5 to the
contrary, in the event any one or more Lenders (for purposes of this subsection
10.5, "ENFORCING LENDERS") receives any amounts that are subject to the sharing
provisions of subsection 10.5A as a result of such Enforcing Lender or Enforcing
Lenders, but not Administrative Agent or all Lenders, commencing Proceedings to
recover such amounts, no Lender that is not an Enforcing Lender shall be
entitled to the benefits of subsection 10.5A with respect to the amounts
received by such Enforcing Lenders (i) unless and until such Lender has paid its
Pro Rata Share of the out-of-pocket costs and expenses (including legal fees and
expenses of counsel to such Enforcing Lenders) incurred by such Enforcing
Lenders in connection with such Proceedings or (ii) in any greater amount at any
time than such Lender would be entitled to receive under such subsection if all
Lenders paid their Pro Rata Shares of such costs and expenses.
10.6. AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes or the Credit Documents, and no
consent to any departure by any Borrower therefrom, shall in any event be
effective without the written concurrence of Requisite Lenders; provided, that
no such amendment, modification, termination, waiver or consent shall, without
the consent of: (a) each Lender with Obligations directly affected (whose
consent shall be required for any such amendment, modification, termination or
waiver in addition to that of Requisite Lenders) (1) reduce the principal amount
of any Revolving Loan or any funded amount with respect to a participation in a
Letter of Credit,
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(2) increase the maximum aggregate amount of such Lender's Revolving Loan
Commitment, Letter of Credit Commitment or Letters of Credit, (3) postpone the
Maturity Date or any other scheduled payment date with respect to the principal
balance of the Revolving Loans, (4) postpone the date on which any interest or
any fees are payable, (5) decrease the interest rate borne by any funded amount
with respect to a participation in a Letter of Credit or any Revolving Loan
(other than any waiver of any increase in the interest rate applicable pursuant
to subsection 2.2E, the penultimate sentence of subsection 3.2 or subsection
6.13) or the amount of any fees payable hereunder, (6) reduce the amount or
postpone the due date of any reimbursement of a drawing (other than from a
Mandatory Payment) in respect of any Letter of Credit, (7) extend the expiration
date of any Letter of Credit beyond the Maturity Date, (8) change in any manner
the obligations of Lenders relating to the purchase of participations in Letters
of Credit, or (9) change in any manner or waive the provisions contained in
subsection 8.1; (b) each Lender, (1) change in any manner the definition of "Pro
Rata Share" or the definition of "Requisite Lenders" (except for any changes
resulting solely from an increase in Letter of Credit Commitments approved by
Requisite Lenders), (2) change in any manner any provision of this Agreement
that, by its terms, expressly requires the approval or concurrence of all
Lenders, (3) release any Lien granted in favor of Administrative Agent or
Collateral Agent with respect to all or substantially all of the Collateral or
release any substantial portion of Borrowers from their obligations under this
Agreement, in each case other than in accordance with the terms of the Credit
Documents, or (4) change in any manner or waive the provisions contained in
subsection 10.6; (c) Administrative Agent and Issuing Lender, change in any
manner the definition of "Eligible Assignee"; (d) Administrative Agent, affect
the rights or duties of Administrative Agent (in its capacity as Administrative
Agent) under this Agreement or any other Credit Document; and (e) Issuing
Lender, affect the rights or duties of Issuing Lender (in its capacity as
Issuing Lender) under this Agreement or any other Credit Document.
In addition, (i) no amendment, modification, termination or
waiver of any provision of any Note shall be effective without the written
concurrence of the Lender which is the holder of that Note, (ii) no amendment,
modification, termination or waiver of any provision of Section 3 shall be
effective without the written concurrence of Administrative Agent and, with
respect to the purchase of participations in Letters of Credit, without the
written concurrence of Issuing Lender, (iii) no amendment, modification,
termination or waiver of any provision of Section 9 or of any other provision of
this Agreement which, by its terms, expressly requires the approval or
concurrence of Administrative Agent shall be effective without the written
concurrence of Administrative Agent, as the case may be and (iii) no amendment,
modification, termination or waiver of any provision of this Agreement which, by
its terms, expressly requires the approval or concurrence of Issuing Lender
shall be effective without the written concurrence of Issuing Lender.
Administrative Agent may, but shall have no obligation to, with the concurrence
of any Lender, execute amendments, modifications, waivers or consents on behalf
of that Lender. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on any Borrower or Borrowers in any case shall entitle any Borrower or
Borrowers to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this
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subsection 10.6 shall be binding upon each Lender at the time outstanding, each
future Lender and, if signed by Borrowers, on Borrowers. Administrative Agent
agrees that promptly after the effectiveness of any amendment, termination,
supplement, waiver or other modification of this Agreement it shall provide, or
cause to be provided, to each Lender a copy thereof to the extent such a copy is
available to Administrative Agent.
10.7. INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
10.8. NOTICES; EFFECTIVENESS OF SIGNATURES.
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, or sent by telefacsimile or United States mail or
courier service or (subject to the following paragraph of this subsection 10.8)
electronic mail and shall be deemed to have been given (a) when delivered in
person or by courier service, (b) upon receipt of telefacsimile in complete and
legible form, (c) 3 Business Days after depositing it in the United States mail
with postage prepaid and properly addressed, or (d) in the case of
communications delivered by electronic mail to the extent provided in the
following paragraph of this subsection 10.8, as provided pursuant to such
paragraph; provided, that notices to Administrative Agent and Issuing Lender
shall not be effective until received. For the purposes hereof, the address of
each party hereto shall be as set forth under such party's name on the signature
pages hereof or (i) as to Company and Administrative Agent, such other address
as shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent.
Notices and other communications to the Lenders hereunder may
be delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by Administrative
Agent; provided, that the foregoing shall not apply to notices to any Lender
pursuant to Section 2 or Section 3 hereof if such Lender has notified
Administrative Agent that it is incapable of receiving notices under such
Section by electronic communication. Administrative Agent or any Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided, that approval of such procedures may be limited to particular notices
or communications.
Credit Documents and notices under the Credit Documents may be
transmitted and/or signed by telefacsimile. The effectiveness of any such
documents and signatures shall, subject to applicable law, have the same force
and effect as an original copy with manual signatures and shall be binding on
all Credit Parties, Administrative Agent and
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Lenders. Administrative Agent may also require that any such documents and
signature be confirmed by a manually-signed copy thereof; provided, however,
that the failure to request or deliver any such manually-signed copy shall not
affect the effectiveness of any facsimile document or signature.
10.9. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein
or in any other Credit Document shall survive the execution and delivery of this
Agreement and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of Borrowers set forth in subsections 2.6D,
2.7, 3.5A, 10.2, 10.3, 10.4, 10.19 and 10.20 and the agreements of Lenders set
forth in subsections 9.2C, 9.4, 10.5, 10.19 and 10.20 shall survive the payment
of the Revolving Loans, the cancellation or expiration of the Letters of Credit
and the reimbursement of any amounts drawn thereunder, and the termination of
this Agreement (and the benefits to a Lender of such agreements of Borrowers
shall survive such Lender's ceasing to be a party hereto pursuant to subsection
10.1B).
10.10. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Administrative Agent or any
Lender in the exercise of any power, right or privilege hereunder or under any
other Credit Document shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement and the other Credit Documents
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
10.11. MARSHALLING; PAYMENTS SET ASIDE.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
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10.12. SEVERABILITY.
In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.13. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS;
DAMAGE WAIVER.
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Letter of Credit Commitments of any
other Lender hereunder. Nothing contained herein or in any other Credit
Document, and no action taken by Lenders pursuant hereto or thereto, shall be
deemed to constitute Lenders, or Lenders and Company, as a partnership, an
association, a Joint Venture or any other kind of entity. The amounts payable at
any time hereunder to each Lender shall be a separate and independent debt, and
each Lender shall be entitled to protect and enforce its rights arising out of
this Agreement and it shall not be necessary for any other Lender to be joined
as an additional party in any proceeding for such purpose.
To the extent permitted by law, each Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with or as a result
of this Agreement, any other Credit Document, any transaction contemplated by
the Credit Documents, any Letter of Credit or Revolving Loan or the use of
proceeds of drawings thereunder.
10.14. RELEASE OF SECURITY INTEREST.
Upon the proposed sale or other disposition of any Collateral
that is permitted by this Agreement or to which Requisite Lenders have otherwise
consented, for which a Credit Party desires to obtain a security interest
release from Collateral Agent, such Credit Party shall deliver to Administrative
Agent and Collateral Agent an Officer's Certificate (i) stating that the
Collateral or the Capital Stock subject to such disposition is being sold or
otherwise disposed of in compliance with the terms hereof and of the Credit
Documents and (ii) specifying the Collateral or Capital Stock being sold or
otherwise disposed of in the proposed transaction. Upon the receipt of such
Officer's Certificate, Collateral Agent shall, at such Credit Party's expense,
so long as Collateral Agent (a) believes in good faith that the facts stated in
such Officer's Certificate are true and correct and (b) if the sale or other
disposition of such item of Collateral or Capital Stock constitutes an Asset
Sale, shall have received evidence satisfactory to it that arrangements
satisfactory to it have been made for delivery of the Net Asset Sale Proceeds if
and as required by subsection 2.4, execute and deliver such releases of its
security interest in such Collateral as may be reasonably requested by such
Credit Party. In the event of any conflict or inconsistency between this
subsection 10.14 and the terms of the Intercreditor Agreement, the terms of the
Intercreditor Agreement shall prevail.
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10.15. HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.16. APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER OR ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT
WOULD REQUIRE APPLICATION OF ANOTHER LAW.
10.17. CONSTRUCTION OF AGREEMENT.
Each of the parties hereto acknowledges that it has been
represented by counsel in the negotiation and documentation of the terms of this
Agreement, that it has had full and fair opportunity to review and revise the
terms of this Agreement, and that this Agreement has been drafted jointly by all
of the parties hereto. Accordingly, each of the parties hereto acknowledges and
agrees that the terms of this Agreement shall not be construed against or in
favor of another party.
10.18. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY BORROWER ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, OR ANY
OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK (AS ANY OF
ADMINISTRATIVE AGENT, ANY LENDER OR LENDERS BRINGING SUCH ACTION MAY ELECT IN
ITS OR THEIR SOLE DISCRETION). BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH
BORROWER, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(i) ACCEPTS (AND SUBMITS TO) GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(ii) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(iii) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO SUCH
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BORROWER AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION 10.8;
(iv) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH BORROWER IN ANY
SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT;
(v) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST SUCH
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION; AND
(vi) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.18
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO
THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
10.19. WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS CREDIT TRANSACTION
OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. Each party hereto acknowledges that this waiver
is a material inducement to enter into a business relationship, that each has
already relied on this waiver in entering into this Agreement, and that each
will continue to rely on this waiver in their related future dealings. Each
party hereto further warrants and represents that it has reviewed this waiver
with its legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
10.19 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE CREDIT EXTENDED HEREUNDER. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
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10.20. CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement that has been identified as
confidential by Company in accordance with such Lender's customary procedures
for handling confidential information of this nature and in accordance with safe
and sound banking practices, it being understood and agreed by Borrowers that in
any event a Lender may make (a) disclosures to Affiliates and professional
advisors of such Lender, (b) disclosures reasonably required by (i) any bona
fide assignee, transferee or participant in connection with the contemplated
assignment or transfer by such Lender of any Obligations or any participations
therein, or (ii) any direct or indirect contractual counterparties in swap
agreements or such contractual counterparties' professional advisors provided,
that such assignee, transferee, participant, contractual counterparty or
professional advisor agrees to keep such information confidential to the same
extent required of Lenders hereunder, (c) disclosures to any court or tribunal
(whether or not pursuant to subpoena) in connection with any action arising out
of or related to this Agreement, or (d) disclosures required or requested by any
Government Authority or representative thereof or pursuant to legal process;
provided, that unless specifically prohibited by applicable law or court order,
each Lender shall notify Company of any request by any Government Authority or
representative thereof (other than any such request in connection with any
examination of such Lender by such Government Authority) for disclosure of any
such non-public information prior to disclosure of such information; and
provided, further, that in no event shall any Lender be obligated or required to
return any materials furnished by Company or any of its Subsidiaries (including
CPIH Subsidiaries).
Notwithstanding anything herein to the contrary, information
required to be treated as confidential by reason of the foregoing shall not
include, and Administrative Agent, each Lender and the respective Affiliates of
each of the foregoing (and the respective partners, directors, officers,
employees, agents, advisors and other representatives of each of the foregoing
and their respective Affiliates) (collectively, the "LENDER PARTIES") may
disclose to any and all Persons, without limitation of any kind, (x) any
information with respect to United States federal and state income tax treatment
and United States federal income tax structure of the transactions contemplated
hereby and any facts that may be relevant to understanding such tax treatment,
which facts shall not include for this purpose the names of the parties or any
other Person named herein, or information that would permit identification of
the parties or such other Persons, or any pricing terms or other non-public
business or financial information that is unrelated to such tax treatment or
facts, and (y) all materials of any kind (including opinions or other tax
analyses) relating to such tax treatment or facts that are provided to any of
the Lender Parties.
10.21. NO FIDUCIARY DUTY.
Neither Administrative Agent nor any Lender has or shall have,
by reason of this Agreement or any of the Credit Documents, a fiduciary
relationship in respect of, or a fiduciary duty to, any Borrower, Borrowers, any
other Credit Party or Credit Parties, and the relationship between
Administrative Agent and Lenders, on one hand, and each Borrower, on the other
hand, in connection herewith or therewith is solely that of debtor and creditor.
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10.22. COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith 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 an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto.
10.23. NO THIRD PARTY BENEFICIARIES.
Nothing in this Agreement, express or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Indemnitees and Released Parties related to
Administrative Agent, and Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BORROWERS:
COVANTA ENERGY CORPORATION, as Borrower
By:
-------------------------------------
Title:
----------------------------------
EACH OF THE ENTITIES NAMED ON SCHEDULE
A ANNEXED
By:
-------------------------------------
Title:
----------------------------------
Notice Address for each Borrower:
c/o Covanta Energy Group, Inc.
40 Lane Road
Fairfield, NJ 07007
Attn: Jeffrey Horowitz, Esq.
S-1
ADMINISTRATIVE AGENT AND LENDERS:
BANK ONE, NA,
as Administrative Agent and as Issuing
Lender
By:
-------------------------------------
Name:
----------------------------
Title:
---------------------------
Notice Address:
120 South LaSalle Street
8th Floor
Chicago, IL 60603
Attn: Douglas Boersma
Facsimile: (312) 661-7352
SZ INVESTMENTS, L.L.C.,
as a Lender
By:
-------------------------------------
Name:
----------------------------
Title:
---------------------------
Notice Address:
Two North Riverside Plaza
Suite 600
Chicago, Illinois 60606
Attention: Donald J. Liebentritt and
Philip G. Tinkler
Facsimile: (312) 454-0335
S-2
D. E. SHAW LAMINAR PORTFOLIOS, L.L.C.,
as a Lender
By:
-------------------------------------
Name:
----------------------------
Title:
---------------------------
Notice Address:
120 West Forty-Fifth Street
Floor 39, Tower 45
New York, NY 10036
Attention: Max Holmes
Facsimile: (212) 478-0100
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019
Attention: Steven Wilamowsky, Esq.
Facsimile: (212) 728-8111
THIRD AVENUE TRUST, ON BEHALF OF THE
THIRD AVENUE VALUE FUND SERIES,
as a Lender
By:
-------------------------------------
Name:
----------------------------
Title:
---------------------------
Notice Address:
622 Third Avenue
New York, NY 10017
Attention: General Counsel
Facsimile: (212) 735-0003
with a copy to:
Pillsbury Winthrop LLP
One Battery Park Plaza
New York, NY 10004
Attention: Richard Epling, Esq.
Facsimile: (212) 858-1500
S-3
SCHEDULE A
1. COMPANY
2. AMOR 14 Corporation
3. Burney Mountain Power
4. Covanta Acquisition, Inc.
5. Covanta Alexandria/Arlington, Inc.
6. Covanta Bessemer, Inc.
7. Covanta Bristol, Inc.
8. Covanta Cunningham Environmental Support, Inc.
9. Covanta Energy Americas, Inc.
10. Covanta Energy Construction, Inc.
11. Covanta Energy Corporation
12. Covanta Energy Group, Inc.
13. Covanta Energy International, Inc.
14. Covanta Energy Resource Corp.
15. Covanta Energy Services, Inc.
16. Covanta Energy West, Inc.
17. Covanta Engineering Services, Inc.
18. Covanta Fairfax, Inc.
19. Covanta Geothermal Operations Holdings, Inc.
20. Covanta Geothermal Operations, Inc.
21. Covanta Haverhill Properties, Inc.
22. Covanta Haverhill, Inc.
23. Covanta Heber Field Energy, Inc.
24. Covanta Hennepin Energy Resource Co., Limited Partnership
25. Covanta Hillsborough, Inc.
26. Covanta Honolulu Resource Recovery Venture
27. Covanta Huntsville, Inc.
28. Covanta Hydro Energy, Inc.
29. Covanta Hydro Operations West, Inc.
30. Covanta Hydro Operations, Inc.
31. Covanta Imperial Power Services, Inc.
32. Covanta Indianapolis, Inc.
33. Covanta Kent, Inc.
34. Covanta Lancaster, Inc.
35. Covanta Lee, Inc.
36. Covanta Long Island, Inc.
37. Covanta Marion Land Corp.
38. Covanta Marion, Inc.
39. Covanta Mid-Conn, Inc.
40. Covanta Montgomery, Inc.
41. Covanta New Martinsville Hydroelectric Corporation
42. Covanta New Martinsville Hydro-Operations Corporation
43. Covanta Oahu Waste Energy Recovery, Inc.
44. Covanta Omega Lease, Inc.
45. Covanta Onondaga Operations, Inc.
46. Covanta Operations of Union, LLC
47. Covanta OPW Associates, Inc.
48. Covanta OPWH, Inc.
49. Covanta Pasco, Inc.
50. Covanta Plant Services of New Jersey, Inc.
51. Covanta Power Equity Corporation
52. Covanta Power Pacific, Inc.
53. Covanta Power Plant Operations
54. Covanta Projects of Hawaii, Inc.
55. Covanta Projects, Inc.
56. Covanta RRS Holdings, Inc.
57. Covanta Secure Services, Inc.
58. Covanta SIGC Energy, Inc.
59. Covanta SIGC Energy II, Inc.
60. Covanta SIGC Geothermal Operations, Inc.
61. Covanta Stanislaus, Inc.
62. Covanta Systems, LLC
63. Covanta Wallingford Associates, Inc.
64. Covanta Waste to Energy , LLC
65. Covanta Water Holdings, Inc.
66. Covanta Water Systems, Inc.
67. Covanta Water Treatment Services, Inc.
68. DSS Environmental, Inc.
69. ERC Energy II, Inc.
70. ERC Energy, Inc.
71. Haverhill Power, LLC
72. Heber Field Energy II, Inc.
73. Heber Loan Partners
74. LMI, Inc.
75. Mammoth Geothermal Company
76. Mammoth Power Company
77. Michigan Waste Energy, Inc.
78. Mt. Lassen Power
79. Pacific Geothermal Company
80. Pacific Oroville Power, Inc.
81. Pacific Wood Fuels Company
82. Pacific Wood Services Company
83. Three Mountain Operations, Inc.
84. Three Mountain Power, LLC
Dates Referenced Herein and Documents Incorporated by Reference
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