EXHIBIT 10.2
FIRST AMENDMENT
TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is
dated as of December 15, 2004 and entered into by and among COVANTA ENERGY
CORPORATION, a Delaware corporation ("Company"), and THE SUBSIDIARIES OF COMPANY
LISTED ON THE SIGNATURE PAGES HEREOF AS BORROWERS (collectively, Company and
such Subsidiaries of Company are "Borrowers" and each a "Borrower"), THE LENDERS
PARTY HERETO, and BANK ONE, N.A., as Administrative Agent for the Lenders
("Administrative Agent"), and is made with reference to that certain Credit
Agreement dated as of March 10, 2004 by and among Borrowers, the financial
institutions parties thereto as Lenders, and Administrative Agent (the "Credit
Agreement"). Capitalized terms used herein without definition shall have the
same meanings herein as set forth in the Credit Agreement (as amended by this
Amendment).
RECITALS
WHEREAS, Borrowers and the undersigned Lenders desire (i) to
amend the Credit Agreement to permit the termination, sale and/or assignment of
the obligations relating to certain landfill gas Projects of Covanta Power
Pacific, Inc., Pacific Recovery Corporation and 0000 Xxxxxxx Xxxxxx Corporation,
to permit the assignment of the contracts relating to the wastewater treatment
facility with the Village of Canastota, New York, and to permit the separation
of Mt. Lassen and Xxxxxx Mountain wood plant Projects and the permit for the
Three Mountain Power Project from the other wood plant Projects of Company and
its Subsidiaries, and (ii) to make certain other amendments to the Credit
Agreement, subject to the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 PROVISIONS RELATING TO DEFINED TERMS.
Subsection 1.1 of the Credit Agreement is hereby amended by
inserting the following new definitions in the appropriate alphabetical order:
"CANASTOTA PROJECT" means the wastewater treatment facility
for the Village of Canastota, New York.
"CANASTOTA PROJECT AGREEMENT" means the Operation and
Maintenance of the Village of Canastota Wastewater Treatment Facility Agreement,
dated June 1998, between the Village of Canastota and CES, as in effect
immediately prior to the First Amendment Effective Date.
"CPPI" means Covanta Power Pacific, Inc., a Delaware
corporation.
"CES" means Covanta Xxxxxxxxxx Environmental Support, Inc.
"FIRST AMENDMENT" means the First Amendment to Credit
Agreement by and among Borrowers, Administrative Agent and Lenders, dated as of
December 15, 2004.
"FIRST AMENDMENT EFFECTIVE DATE" has the meaning assigned to
that term in Section 2 of the First Amendment.
"GRRP" means Generating Resource Recovery Partners, L.P., a
California limited partnership.
"XXXX PROJECT" means the landfill gas Project in Xxxxxxxxxx
County, Maryland.
"XXXX PROJECT AGREEMENTS" means, collectively, each of the
agreements set forth on Exhibit A to the First Amendment, as in effect
immediately prior to the First Amendment Effective Date.
"INACTIVE FOREIGN SUBSIDIARY" and "INACTIVE FOREIGN
SUBSIDIARIES" have the meanings assigned to those terms in Section 8.
"XXXXXXX PROJECT" means the landfill gas Project in Sun
Valley, California.
"XXXXXXX PROJECT AGREEMENTS" means, collectively, each of the
agreements set forth on Exhibit B to the First Amendment, as in effect
immediately prior to the First Amendment Effective Date.
"PEOG" means Pacific Energy Operating Group, L.P., a
California limited partnership.
"PEOG/GRRP PURCHASE" means the purchase by CPPI (or a
Subsidiary of CPPI that is a Borrower) from Xxxxxxxxx Power, Inc. of all of the
outstanding limited partnership interests in PEOG and GRRP for cash
consideration in the aggregate amount of $10.00 pursuant to documentation in
form and substance satisfactory to Agents.
"PERI" means Pacific Energy Resources Incorporated, a
California corporation.
"SANTA XXXXX PROJECT" means the landfill gas Project in Santa
Clara, California.
"SANTA XXXXX PROJECT AGREEMENTS" means, collectively, each of
the agreements set forth on Exhibit C to the First Amendment, as in effect
immediately prior to the First Amendment Effective Date.
"TOYON PROJECT" means the landfill gas Project in Los Angeles,
California.
"TOYON PROJECT AGREEMENTS" means, collectively, each of the
agreements set forth on Exhibit D to the First Amendment, as in effect
immediately prior to the First Amendment Effective Date.
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"TUJUNGA" means 0000 Xxxxxxx Xxxxxx Corporation, a California
corporation.
1.2 PROVISIONS RELATING TO REPRESENTATIONS AND WARRANTIES.
Section 5 of the Credit Agreement is hereby amended by adding
at the end thereof a new subsection 5.24 as follows:
"5.24 INACTIVE FOREIGN SUBSIDIARIES. None of the Inactive
Foreign Subsidiaries has any material assets or operations. Borrowers
have commenced dissolution proceedings with respect to the Inactive
Foreign Subsidiaries."
1.3 PROVISIONS RELATING TO NEGATIVE COVENANTS.
A. Subsection 7.3 of the Credit Agreement is hereby amended by
(i) deleting the "and" at the end of paragraph (xiii) thereof, (ii) deleting the
"." at the end of paragraph (xiv) thereof and substituting therefor "; and", and
(iii) adding at the end thereof the following new paragraph (xv):
"(xv) CPPI (or a Subsidiary of CPPI that is a Borrower) may
consummate the PEOG/GRRP Purchase and own Investments in all of the
outstanding limited partnership interests in PEOG and GRRP, so long as
(i) on and after consummation of the PEOG/GRRP Purchase all of the
outstanding limited partnership interests in PEOG and GRRP shall be
owned by CPPI (or a Subsidiary of CPPI that is a Borrower), (ii) upon
consummation of the PEOG/GRRP Purchase, Collateral Agent shall be
granted a First Priority perfected Lien in such limited partnership
interests, and each Credit Party shall have executed such documents and
taken such actions as may be required by the Credit Documents in
connection therewith, (iii) immediately after giving effect to thereto,
the PEOG/GRRP Purchase will not expand or modify the existing
obligations of CPPI or any of its Subsidiaries to PEOG or GRRP and will
not give rise to any obligations on the part of CPPI or any of its
Subsidiaries to make capital contributions in respect of the limited
partnership interests in PEOG and GRRP held by it and (iv) upon
consummation of the PEOG/GRRP Purchase, Administrative Agent shall have
received written acknowledgement in form and substance satisfactory to
Administrative Agent from Company and its Subsidiaries with respect to
the matters described in clause (iii) hereof."
B. Subsection 7.6C of the Credit Agreement is hereby amended
and restated in its entirety as follows:
"C. MINIMUM CONSOLIDATED NET WORTH. Company shall not permit
Consolidated Net Worth as at any date on or after the end of the most
recently ended Fiscal Quarter set forth in the table below to be less
than the correlative amount indicated:
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FISCAL QUARTER MINIMUM CONSOLIDATED NET WORTH
------------------------------------------ --------------------------------------------------------------
FQ4 2004 $46,017,000
FQ1 2005 $47,574,000
FQ2 2005 $49,130,000
FQ3 2005 $50,687,000
FQ4 2005 $52,243,000
FQ1 2006 $57,508,000
FQ2 2006 $59,508,000
FQ3 2006 $63,508,000
FQ4 2006 $67,908,000
FQ1 2007 $70,908,000
FQ2 2007 $73,908,000
FQ3 2007 $77,908,000
FQ4 2007 $82,724,000
FQ1 2008 $84,724,000
FQ2 2008 $86,724,000
FQ3 2008 $89,724,000
FQ4 2008 and thereafter $94,146,000
C. Subsection 7.7 of the Credit Agreement is hereby amended by
(i) deleting the "and" at the end of paragraph (iii) thereof, (ii) deleting the
"." at the end of paragraph (iv) thereof and substituting therefor "; and", and
(iii) adding at the end thereof the following:
"(v) PERI may transfer to CPPI all of the outstanding Capital
Stock of Pacific Ultrapower Chinese Station held by PERI on the First
Amendment Effective Date, so long as (a) such transfer occurs on or
prior to Xxxxx 00, 0000, (x) upon such transfer, Collateral Agent shall
be granted a First Priority perfected Lien in such Capital Stock, and
each Credit Party shall have executed such documents and taken such
actions as may be required by the Credit Documents in connection
therewith, (c) such transfer shall not give rise to any additional
obligations of any Borrower other than under this Agreement and the
Credit Documents and other than tax obligations not exceeding $35,000
arising directly in connection with such transfer and (d) on or prior
to the date of such transfer, Administrative Agent shall have received
an Officer's Certificate in form and substance satisfactory to
Administrative Agent from Company and its Subsidiaries certifying as to
the matters described in clauses (b) and (c).
Notwithstanding any provision of this Agreement that would
otherwise permit the following, CES may assign all of its rights and
obligations under the Canastota Project Agreement to a third party, but
only if (a) such assignment occurs on or prior to December 31, 2004,
(b) after giving effect to such assignment, Borrowers and each of their
respective Subsidiaries have no
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outstanding or further obligations under or arising out of the
Canastota Project Agreement, under any guaranty or otherwise, (c) on or
prior to the date of such assignment, each of the Village of Canastota
and the assignee of Canastota Project Agreement shall have acknowledged
in writing that it releases any claims against CES, Borrowers and any
of their respective Subsidiaries arising out of or relating to the
Canastota Project Agreement, and (d) on or prior to the date of such
assignment, Administrative Agent shall have received an Officer's
Certificate in form and substance satisfactory to Administrative Agent
from Company certifying as to the matters described in clauses (b) and
(c).
Notwithstanding any provision of this Agreement that would
otherwise permit the following, CPPI, PEOG and Tujunga may assign all
of their rights and obligations under the Xxxxxxx Project Agreements
and the Toyon Project Agreements to Xxxxxxx Landfill Gas Conversion,
LLC and Toyon Landfill Gas Conversion, LLC, respectively, and Xxxxxxx
Landfill Gas Conversion, LLC and Toyon Landfill Gas Conversion, LLC may
assign and/or sell all of their rights and obligations under the
Xxxxxxx Project Agreements and the Toyon Project Agreements,
respectively, to a third party, in each case only if (a) each such
assignment or sale occurs on or prior to Xxxxx 00, 0000, (x) after
giving effect to any assignment or sale of the Xxxxxxx Project
Agreements to a third party, Borrowers and each of their respective
Subsidiaries have no outstanding or further obligations under or
arising out of the Xxxxxxx Project Agreements, under any guaranty or
otherwise, (c) after giving effect to any assignment or sale of the
Toyon Project Agreements to a third party, Borrowers and each of their
respective Subsidiaries have no outstanding or further obligations
under or arising out of the Toyon Project Agreements, under any
guaranty or otherwise (other than under an agreement with respect to
the provision of transitional operations and maintenance services on
terms and conditions and pursuant to documentation in form and
substance satisfactory to Administrative Agent), and (d) on or prior to
the date of any assignment or sale of the Xxxxxxx Project Agreements or
the Toyon Project Agreements to a third party, Administrative Agent
shall have received an Officer's Certificate in form and substance
satisfactory to Administrative Agent from Company certifying as to the
matters described in clause (b) or clause (c), respectively."
1.4 PROVISIONS RELATING TO EVENTS OF DEFAULT.
A. Subsection 8.14 of the Credit Agreement is hereby amended
by adding immediately prior to the ";" at the end thereof the following new
proviso:
"; provided, however, that termination by Company and its
Subsidiaries of any of the Xxxx Project Agreements, the Xxxxxxx Project
Agreements, the Santa Xxxxx Project Agreements and the Toyon Project
Agreements shall not constitute an Event of Default under this
subsection 8.14, so long as, in each case, (i) such termination is in
connection with a sale or closure of the relevant
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Project that is not prohibited under this Agreement, (ii) such
termination occurs on or prior to Xxxxx 00, 0000, (xxx) on or prior to
the date of such termination, Administrative Agent shall have received
an Officer's Certificate in form and substance satisfactory to
Administrative Agent from Company and its Subsidiaries acknowledging
that such termination will not give rise to any obligations (or
accelerate or cause to mature any existing payment obligations) on the
part of any Borrower under any guaranty or otherwise, (iv) such
termination is pursuant to the contractual right of termination in such
agreements or the mutual agreement of the parties thereto and (v)
Company and its Subsidiaries exercise best efforts after such
termination to collect any applicable termination penalty or other
obligations owed to Company or any of its Subsidiaries by the
counterparty to such agreements".
B. Section 8 of the Credit Agreement is hereby amended by
adding at the end thereof (immediately before Section 9 of the Credit Agreement)
the following:
"Notwithstanding anything in the Credit Agreement or the other
Credit Documents to the contrary, so long as OPI Xxxxxxx Limited, a
company organized under the laws of the Cayman Islands, OPI Xxxxxxx One
Limited, a company organized under the laws of the Cayman Islands, or
Covanta Energy Europe, Inc., a company organized under the laws of the
United Kingdom (each, an "INACTIVE FOREIGN SUBSIDIARY", and
collectively, the "INACTIVE FOREIGN SUBSIDIARIES"), has no material
assets or operations, (i) Borrowers shall not be required to deliver
certificates representing the Capital Stock of such Inactive Foreign
Subsidiary (or any endorsement or instrument of transfer or assignment
with respect thereto) to Collateral Agent and (ii) the failure of
Borrowers to deliver any such certificate, endorsement or instrument
shall not be deemed a breach of subsection 5.15A of this Agreement or
Section 4(f) or 9(a) of the Security Agreement. Each Borrower hereby
agrees to use commercially reasonable efforts to complete the 'winding
down' and dissolution of the Inactive Foreign Subsidiaries as soon as
practicable after the First Amendment Effective Date in accordance with
any applicable law, statute, rule or regulation. Each Borrower further
agrees that prior to the completion of such 'winding down' and
dissolution, such Inactive Foreign Subsidiaries shall conduct no
business other than in connection with their 'winding down' and
dissolution."
1.5 SCHEDULES.
Schedules 7.4(iv) and 7.4(vi) of the Credit Agreement are
hereby amended by deleting them in their entirety and substituting in place
thereof new Schedules 7.4(iv) and 7.4(vi) in the form of such Schedules set
forth on Annex A to this Amendment.
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SECTION 2. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall only become effective upon
the first date on which all of the following conditions precedent shall have
been satisfied (the date of satisfaction of such conditions being referred to
herein as the "FIRST AMENDMENT EFFECTIVE DATE"):
2.1 DETROIT L/C FACILITY AGREEMENT AMENDMENT. Agents shall have
received a fully executed amendment to the Detroit L/C Facility Agreement
executed by "Requisite Lenders" thereunder, on terms and conditions
substantially identical to the terms and conditions of this Amendment and
pursuant to documentation in form and substance satisfactory to the
Administrative Agent, the conditions precedent to the effectiveness of each of
the provisions of which shall have been satisfied.
2.2 AMENDMENT FEE. Borrowers shall have paid to Administrative Agent,
for distribution to Lenders that have executed and delivered a counterpart to
this Amendment prior to 12:00 Noon (New York City time) on December 15, 2004
ratably according to their relative Letter of Credit Exposure, an amendment fee
equal to 0.15% of the aggregate Letter of Credit Exposure of all Lenders on and
as of such date, and after giving effect to the payment of such fees Borrowers
shall be in compliance with subsection 6.13 of the Amended Agreement (as
hereinafter defined).
2.3 ADMINISTRATIVE AGENT'S FEE. Borrowers shall have paid to
Administrative Agent an agent's fee of $5,000.
2.4 NEW BORROWERS. Borrowers shall have executed and delivered all
documents and instruments and taken all actions required under subsections 6.8A
and 6.8B of the Credit Agreement with respect to Xxxxxxx Landfill Gas
Conversion, LLC and Toyon Landfill Gas Conversion, LLC as if such entities were
Additional Subsidiary Borrowers, and CPPI shall have executed and delivered all
documents and instruments and taken all actions required under the Security
Agreement and the other Credit Documents with respect to its membership
interests in Xxxxxxx Landfill Gas Conversion, LLC and Toyon Landfill Gas
Conversion, LLC.
2.5 ACKNOWLEDGMENT AND CONSENT. The Administrative Agent shall have
received a fully-executed Acknowledgement and Consent to this Amendment executed
by DHC, pursuant to documentation in form and substance to the Administrative
Agent.
SECTION 3. BORROWERS' REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Amendment
and to amend the Credit Agreement in the manner provided herein, Borrowers
represent and warrant to each Lender that the following statements are true,
correct and complete:
3.1 CORPORATE POWER AND AUTHORITY. Each Credit Party that is party
thereto has all requisite corporate power and authority to enter into this
Amendment and to carry out the transactions contemplated by, and perform its
obligations under, the Credit Agreement as amended by this Amendment
(collectively, the "AMENDED AGREEMENT").
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3.2 AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment have been duly authorized by all necessary corporate action on the
part of each Credit Party that is party thereto and the performance of this
Amendment and the Amended Agreement has been duly authorized by all necessary
corporate action on the part of each Credit Party that is party thereto.
3.3 NO CONFLICT. The execution and delivery by each Credit Party that
is party to this Amendment and the performance by each Borrower of this
Amendment and the Amended Agreement 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,
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.
3.4 GOVERNMENTAL CONSENTS. The execution and delivery by each Credit
Party that is party to this Amendment and the performance by each Borrower of
this Amendment and the Amended Agreement do not and will not require any
Governmental Authorization.
3.5 BINDING OBLIGATION. This Amendment has been duly executed and
delivered by each Credit Party that is party thereto, and each of this Amendment
and the Amended Agreement is the legally valid and binding obligation of each
Credit Party enforceable against each 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.
3.6 INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 5 of the
Amended Agreement are and will be true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
3.7 ABSENCE OF DEFAULT. As of the date hereof after giving effect
hereto, there exists no Event of Default or Potential Event of Default under the
Credit Agreement.
SECTION 4. ACKNOWLEDGEMENT AND CONSENT
Each Borrower hereby acknowledges that it has read this
Amendment and consents to the terms hereof and further hereby confirms and
agrees that, notwithstanding the effectiveness of this Amendment, the
obligations of such Credit Party under each of the Credit Documents to which
such Credit Party is a party shall not be impaired and each of the
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Credit Documents to which such Credit Party is a party are, and shall continue
to be, in full force and effect and are hereby confirmed and ratified in all
respects.
SECTION 5. DISTRIBUTION OF EXCESS DISTRIBUTABLE CASH.
Each Borrower hereby agrees that on or before February 15,
2005, Borrowers shall designate not less than $5,000,000 as "Excess
Distributable Cash" under the Approved Plan of Reorganization, which "Excess
Distributable Cash" shall be distributed on or before such date in accordance
with the Approved Plan of Reorganization.
SECTION 6. MISCELLANEOUS
6.1 REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER
CREDIT DOCUMENTS.
A. On and after the First Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement, and each
reference in the other Credit Documents to the "Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement shall mean
and be a reference to the Credit Agreement as amended by this Amendment.
B. Except as specifically amended by this Amendment, the
Credit Agreement and the other Credit Documents shall remain in full force and
effect and are hereby ratified and confirmed.
C. The execution, delivery and performance of this Amendment
shall not constitute a waiver of any provision of, or operate as a waiver of any
right, power or remedy of any Agent or any Lender under, the Credit Agreement or
any of the other Credit Documents.
6.2 FEES AND EXPENSES. Each Borrower acknowledges that all costs, fees
and expenses as described in subsection 10.2 of the Credit Agreement incurred by
Administrative Agent or the Lenders and counsel to Administrative Agent with
respect to this Amendment and the documents and transactions contemplated hereby
shall be for the account of Borrowers.
6.3 HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
6.4 APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
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6.5 COUNTERPARTS; EFFECTIVENESS. This Amendment 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.
Executed counterparts hereof may be delivered by
telefacsimile. The effectiveness of any such 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
Lenders. Administrative Agent may also require that any such signatures 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 signature.
This Amendment (other than Section 1 hereof, the effectiveness
of which shall be governed by Section 2 hereof) shall become effective upon the
first date on which: (i) Borrowers and Requisite Lenders shall have each
executed a counterpart hereof, and (ii) Company and Administrative Agent shall
have received written or telephonic notification of such execution and
authorization of delivery of such counterparts.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BORROWERS: COVANTA ENERGY CORPORATION
By:
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Officer
EACH OF THE ENTITIES NAMED ON SCHEDULE 1
ANNEXED HERETO, as a Borrower
By:
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Officer
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SCHEDULE 1
Other Borrowers
1. AMOR 14 Corporation
2. Xxxxxx Mountain Power
3. Covanta Acquisition, Inc.
4. Covanta Alexandria/Arlington, Inc.
5. Covanta Bessemer, Inc.
6. Covanta Bristol, Inc.
7. Covanta Xxxxxxxxxx Environmental Support, Inc.
8. Covanta Energy Americas, Inc.
9. Covanta Energy Construction, Inc.
10. Covanta Energy Group, Inc.
11. Covanta Energy International, Inc.
12. Covanta Energy Resource Corp.
13. Covanta Energy Services, Inc.
14. Covanta Energy West, Inc.
15. Covanta Engineering Services, Inc.
16. Covanta Fairfax, Inc.
17. Covanta Geothermal Operations Holdings, Inc.
18. Covanta Geothermal Operations, Inc.
19. Covanta Haverhill Properties, Inc.
20. Covanta Haverhill, Inc.
21. Covanta Heber Field Energy, Inc.
22. Covanta Hennepin Energy Resource Co., Limited Partnership
23. Covanta Hillsborough, Inc.
24. Covanta Honolulu Resource Recovery Venture
25. Covanta Huntsville, Inc.
26. Covanta Hydro Energy, Inc.
27. Covanta Hydro Operations West, Inc.
28. Covanta Hydro Operations, Inc.
29. Covanta Imperial Power Services, Inc.
30. Covanta Indianapolis, Inc.
31. Covanta Kent, Inc.
32. Covanta Lancaster, Inc.
33. Covanta Xxx, Inc.
34. Covanta Long Island, Inc.
35. Covanta Xxxxxx Land Corp.
36. Covanta Xxxxxx, Inc.
37. Covanta Mid-Conn, Inc.
38. Covanta Xxxxxxxxxx, Inc.
39. Covanta New Martinsville Hydroelectric Corporation
40. Covanta New Martinsville Hydro-Operations Corporation
41. Covanta Oahu Waste Energy Recovery, Inc.
42. Covanta Omega Lease, Inc.
43. Covanta Onondaga Operations, Inc.
44. Covanta Operations of Union, LLC
45. Covanta OPW Associates, Inc.
46. Covanta OPWH, Inc.
47. Covanta Pasco, Inc.
48. Covanta Plant Services of New Jersey, Inc.
49. Covanta Power Equity Corporation
50. Covanta Power Pacific, Inc.
51. Covanta Power Plant Operations
52. Covanta Projects of Hawaii, Inc.
53. Covanta Projects, Inc.
54. Covanta RRS Holdings, Inc.
55. Covanta Secure Services, Inc.
56. Covanta SIGC Energy, Inc.
57. Covanta SIGC Energy II, Inc.
58. Covanta SIGC Geothermal Operations, Inc.
59. Covanta Stanislaus, Inc.
60. Covanta Systems, LLC
61. Covanta Tampa Bay, Inc.
62. Covanta Tampa Construction, Inc.
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. Xxxxxxx Landfill Gas Conversion, LLC
84. Three Mountain Operations, Inc.
85. Three Mountain Power, LLC
86. Toyon Landfill Gas Conversion, LLC
AGENTS AND LENDERS: BANK ONE, N.A.,
as Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: First Vice President
SZ INVESTMENTS, L.L.C., as a Lender
By: /s/ Xxxxxx X. Xxxxxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
XXXXXXX SACHS CREDIT PARTNERS,
L.P., as a Lender
By:
Its: General Partner
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Authorized Signatroy
THIRD AVENUE TRUST, ON BEHALF OF
THE THIRD AVENUE VALUE FUND
SERIES, as a Lender
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Treasurer
TRS ELARA LLC, as a Lender
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
ANNEX A
See attachment
SCHEDULE 7.4(iv)
CERTAIN EXISTING PERFORMANCE GUARANTIES*
1. Covanta Guaranty, dated October 1, 1985, between Covanta Energy
Corporation and the City of Alexandria; Alexandria Sanitation
Authority; Arlington County and Arlington Solid Waste Authority, as
amended;
2. Covanta Guaranty, dated December 20, 1985, between Covanta Energy
Corporation, Town of Babylon and the Town of Babylon Industrial
Development Agency;(1)
3. Covanta Guaranty, dated August 1, 1985, between Covanta Energy
Corporation and City of Bristol; Town of Berlin; Town of Burlington;
City of New Britain; Town of Plainville; Town of Plymouth; Town of
Southington; Town of Washington;
4. Covanta Guaranty, dated October 1, 1996, between Covanta Energy
Corporation and Town of Branford, CT; Town of Hartland, CT; and Town of
Seymour, CT.
5. Covanta Guaranty, dated February 1, 1988, between Covanta Energy
Corporation and County of Fairfax; Fairfax County Solid Waste
Authority;
6. Covanta Guaranty, dated December 23, 1986, between Covanta Energy
Corporation and New England Power Co., as amended;
7. Covanta Guaranty, dated August 1998, between Covanta Energy Corporation
and Covanta Haverhill Associates (f/k/a Xxxxx Haverhill Associates);
8. Covanta Guaranty, dated July 8, 2003, between Covanta Energy
Corporation and County of Hennepin;
9. Covanta Guaranty, dated January 9, 1985, between Covanta Energy
Corporation and Hillsborough County, Florida;
10. Covanta Operating Guaranty, dated December 21, 1992, between Covanta
Energy Corporation and City and County of Honolulu;
11. Covanta Liquidated Damages Guaranty, dated July 7, 1993, between
Covanta Energy Corporation and City and County of Honolulu; Connecticut
Bank and Trust, Hawaii Solid Waste Disposal, Energy & Resource Recovery
Facility Trust (assigned to OPI 12/21/92);
12. Amended and Restated Covanta Guaranty, dated June 29, 1989, between
Covanta Energy Corporation and Town of Huntington;
13. Covanta Guaranty, dated June 1, 1988, between Covanta Energy
Corporation and Solid Waste Disposal Authority of the City of
Huntsville;
----------
Note: With respect to Waste to Energy Performance Guaranties with client
communities the operating subsidiary has agreed to pay, and Covanta Energy
Corporation, or an Affiliate, has guaranteed payment of, damages intended to
compensate its customer for lost energy revenues, lack of waste processing
capacity, or excess waste residue. Based upon the Company's performance at each
facility and its system generally, it believes that there is no likelihood that
such damages will be payable.
* Emergence entities may have certain outstanding obligations with respect to
Bankrupt Subsidiaries; however, we cannot make representations that agreements
will be assumed prior to the emergence of those entities.
(1) This entity is a Bankrupt Subsidiary. No decision has been made yet to
assume or reject the contracts listed for this Subsidiary. The Bankrupt
Subsidiary reserves its right under Section 365 of the Bankruptcy Code to assume
or reject each of the contracts listed.
14. Covanta Guaranty, dated December 1, 1985, between Covanta Energy
Corporation and City of Indianapolis;
15. Covanta Guaranty, dated October 1, 1987, between Covanta Energy
Corporation and County of Kent; Department of Public Works;
16. Covanta Guaranty, dated September 25, 1987, between Covanta Energy
Corporation and Lancaster County Solid Waste Management Authority;
17. Covanta Guaranty, dated January 16, 1990, between Covanta Energy
Corporation and Xxx County, as amended;
18. Guaranty Agreement, dated December 11, 1986, of Xxxxx Corporation re:
Obligations of Xxxxx Xxxxxx Systems of Xxxxxx, Inc. and Xxxxx Xxxxxx
Land Corp. to Columbia Williamette Leasing, Inc.
19. Covanta Guaranty, dated September 10, 1984, between Covanta Energy
Corporation and Portland General Electric Co.;
20. Covanta Guaranty, dated September 10, 1984, between Covanta Energy
Corporation and Xxxxxx County Oregon;
21. Covanta Guaranty, dated December 21, 1992, and reaffirmed on July 1,
1996, between Covanta Energy Corporation and Greater Detroit Resource
Authority;
22. Covanta Guaranty, dated December 21, 1992, between Covanta Energy
Corporation and The Detroit Edison Co.;
23. Covanta Guaranty, dated October 21, 1991, and amended July 1, 1996,
between Covanta Energy Corporation and Xxxxx Projects, Inc., Michigan
Waste to Energy, and Greater Detroit Resource Authority;
24. Assignment and Assumption Agreement, dated December 21, 1992, between
Combustion Engineering, Inc., and Covanta Projects, Inc.;
25. Covanta Guaranty, dated November 16, 1990, between Covanta Energy
Corporation and Northeast Maryland Waste Disposal Authority;
26. Amended and Restated Covanta Guaranty, dated November 15, 1992, between
Covanta Energy Corporation and Onondaga County Resource Recovery
Agency;
27. Guarantee Agreement, dated October 10, 2003, between Covanta Energy
Corporation and Covanta Onondaga Limited Partnership;
28. Covanta Guaranty, dated April 15, 1989, between Covanta Energy
Corporation and Pasco County;
29. Covanta Guaranty, dated May 1, 1990, between Covanta Energy Corporation
and City of Modesto and County of Stanislaus;
30. Covanta Guaranty, dated June 1, 1998, between Covanta Energy
Corporation and Covanta Union, Inc.;
31. Covanta Guaranty, dated February 1, 1990, between Covanta Energy
Corporation and Connecticut Resources Recovery Authority (Wallingford);
32. Guaranty, dated June 1, 1998, between Xxxxx Projects Inc. and
Government Utilities Service Corporation;
2
33. Guaranty, dated December 15, 1989, between Covanta Power Pacific Inc.
and Puget Sound Power & Light Company; and
34. Guaranty, dated December 19, 2000, effective as of December 22, 2000,
between Covanta Energy Group, Inc. and the Connecticut Resources
Recovery Authority.
3
SCHEDULE 7.4(vi)
CERTAIN EXISTING CONTINGENT OBLIGATIONS
Project Description Exposure Agreement, as amended to date
------- ----------- -------- -----------------------------
Babylon Interest Rate Swap N/A Interest Rate Swap Agreement, dated August 1,
1985, between Covanta Babylon, Inc. and AIG
Financial Product Corporation.
Bessemer OPI's Guarantee of Service $0 Guarantee, dated June 1, 1998, by Covanta
Agreement ("S.A.") obligations, Projects, Inc. for the benefit of The Governmental
capped at $3 million Utility Services Corporation of the City of
Bessemer.
Bristol Guarantee of performance $0 Electricity Guarantee, dated as of August 1, 1985,
obligations under Power Purchase by Covanta Energy Corporation to and for the
Agreement ("PPA"). benefit of The Connecticut Light and Power Company.
CEC Indemnity Agreement guarantees $4,600,000 Schedule of Policies and Payments -- Paid Loss
CEC's obligations to reimburse Payments Plan and Payment Agreement, dated October
amounts paid by AIG for losses 20, 2002, between National Union Fire Insurance
and expenses under the retention Company of Pittsburgh, PA, on behalf of itself and
for Workers' Compensation, all its affiliates including but not limited to
General Liability for Workers' American Home Assurance Company, The Insurance
Compensation, General Liability Company of the State of Pennsylvania, National
for the policy period. This is a Union Fire Insurance Company of Pittsburgh, PA.,
post petition insurance policy. Commerce and Industry Insurance Company,
Birmingham Fire Insurance Company, Illinois National
Insurance Company, American International South
Insurance Company, AIU Insurance Company and
Covanta Energy Corporation.
CEC Program Agreement guarantees $3,900,000 Program Agreement, dated October 20, 2003, between
CEC's obligations to reimburse ACE American Insurance Company and Covanta Energy
amounts paid by ACE for losses Corporation, Inc.
and expenses under the retention
for Workers' Compensation,
General Liability Automobile
Liability for the policy period.
This is a post petition insurance
policy.
4
Project Description Exposure Agreement, as amended to date
------- ----------- -------- -----------------------------
Haripur Performance L/C's securing $0 $2,630,232 L/C issued per Application for Standby
obligations under Power Purchase Letter of Credit, dated November 21, 1999, between
Agreement ("PPA") Covanta Energy Corporation and Citibank.
Hartford (MidConn) Gurantee of perfrmance to operate $5,000,000 Guaranty, dated December 19, 2000, effective as of
the electiric generation facility December 22, 2000, between Covanta Energy Group,
pursuant to the Operations Inc. and the Connecticut Resources Recovery
Agreement. Authority.
Huntington Guarantee of Partnership $0 Covanta Corporation Guarantee Agreement, dated
obligations, including tax January 30, 1992, by Covanta Energy Corporation to
indemnity and termination put Allstate Insurance Co. and Xxxxx Xxxxxx Systems of
price. Huntington Resource Recovery Nine Corporation.
First Amended & Restated Xxxxx Corporation
Guarantee Agreement, dated January 30, 1992, for
Mission Zeta and Pitney Xxxxx Credit Corporation
Koma Kulshan Guarantee of PPA Obligations $0 Guarantee: dated December 15, 1989, by Covanta
Power Projects, Inc. (f/k/a Pacific Energy) for
the benefit of Puget Sound Power & Light Company
LICA Cash deposit supporting LICA L/C $300,000 Letter Agreement between Covanta Energy
Corporation and Bank of America regarding $300,000
cash deposit in support of the LICA Letter of
Credit issued by Bank of America.
Union Guarantee of Operating Lease $18,195,000 Subordinated Rent Guarantee Agreement, dated June
Obligations (Principal 1, 1998, by Covanta Energy Corporation for the
Amount O/S benefit of the Union County Utilities
on Authority and Summit Bank, as Trustee.
Subordinated
Lease Bonds)
NOTE 1: Where a "$0" appears in the "Exposure" column, this represents the
Company's reasonable expectation related to the applicable Contingent
Obligation.
a. OMS Babylon has no obligation to pay AIG unless Town of Babylon pays Covanta
Babylon (i.e., The cost of the Swap is a pass through to the client.)
5
ACKNOWLEDGMENT AND CONSENT
Reference is made to (i) that certain Credit Agreement (the "CREDIT AGREEMENT")
dated as of March 10, 2004 by and among by and among COVANTA ENERGY CORPORATION,
a Delaware corporation ("COMPANY"), and THE SUBSIDIARIES OF COMPANY LISTED ON
THE SIGNATURE PAGES THEREOF AS BORROWERS (collectively, Company and such
Subsidiaries of Company are "BORROWERS" and each a "BORROWER"), THE LENDERS
PARTY THERETO, and BANK ONE, N.A., as Administrative Agent for the Lenders
("ADMINISTRATIVE AGENT"), and (ii) that certain First Amendment to Credit
Agreement (the "AMENDMENT") dated as of December 15, 2004 by and among
Borrowers, the financial institutions parties thereto as Lenders and
Administrative Agent. Capitalized terms used herein without definition shall
have the same meanings herein as set forth in the Credit Agreement (as amended
by the Amendment). Xxxxxxxxx Holding Corporation, a Delaware corporation
("DHC"), hereby acknowledges that it has read the Amendment and consents to the
terms thereof and further hereby confirms and agrees that, notwithstanding the
effectiveness of the Amendment, the obligations of DHC under each of the Credit
Documents to which it is a party shall not be impaired and each of the Credit
Documents to which DHC is a party are, and shall continue to be, in full force
and effect and are hereby confirmed and ratified in all respects.
On and after the First Amendment Effective Date (as defined in the Amendment),
each reference in the Credit Documents to which DHC is a party to the "Credit
Agreement", "thereunder", "thereof" or words of like import referring to the
Credit Agreement shall mean and be a reference to the Credit Agreement as
amended by the Amendment.
THIS ACKNOWLEDGMENT AND CONSENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
XXXXXXXXX HOLDING CORPORATION,
as a Credit Party
By:
-------------------------------
Name:
--------------------------
Title:
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