SETTLEMENT AGREEMENT
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This Agreement is entered into as of this 31st day of January, 2002, by
and among ▇▇▇▇▇▇▇ Resource Recovery Partners, L.P. (the "Partnership"), RRRP
▇▇▇▇▇▇▇, Inc. (the "General Partner"), RRRP Illinois, LLC (the "Operator", and
together with the Partnership and the General Partner hereinafter sometimes
referred to individually as a "Debtor" and collectively as the "Debtors"), the
undersigned holders (each in its capacity as an individual holder, and
collectively, as an unofficial committee known as the "Bondholders Steering
Committee") of 1999 Bonds (as defined below) issued pursuant to the Indenture
(as defined below) representing the number of holders of 1999 Bonds as reflected
in the signature lines below (each, a "Bondholder" and, collectively, the
"Bondholders"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLC (successor by merger to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Corporation), its Affiliates, and their respective Related Persons (as defined
in section 23 hereof) (collectively, "FW") and SunTrust Bank (formerly known as,
and as successor to, SunTrust Bank, Central Florida, National Association) in
its capacity as trustee under the Indenture (as defined below) (the "Trustee")
and as Litigation Proceeds Trustee (as defined in the Indenture).
W I T N E S S E T H
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WHEREAS, the Partnership was formed to develop, lease, construct, test,
operate and maintain the ▇▇▇▇▇▇▇ Resource Recovery Facility (the "Facility"), a
solid waste-to-energy facility located in the Village of ▇▇▇▇▇▇▇, Illinois (the
"Village"), and certain associated materials, ancillary structures and related
contractual and property interests (which, together with the Facility, are
hereinafter referred to collectively as the "Project"); and
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WHEREAS, the Partnership leases the Facility from the Village pursuant
to the terms of an Amended and Partially Restated Facility Lease Agreement,
dated as of October 15, 1999, as amended, between the Partnership and the
Village; and
WHEREAS, the Operator operated and maintained the Facility pursuant to
a Project Operating and Maintenance Agreement, dated as of October 15, 1999,
between the Operator and the Partnership (the "O&M Agreement"); and
WHEREAS, in addition to the Project, the Partnership previously was the
owner of a solid waste transfer facility located in the Village of Forest View,
Illinois, together with certain associated materials, ancillary structures and
related contractual and property interests (collectively, the "Transfer
Station"), which Transfer Station has been sold to a third party; and
WHEREAS, the Bondholders hold industrial revenue bonds issued by the
Village under a Second Amended and Restated Mortgage, Security Agreement and
Indenture of Trust, dated as of October 15, 1999, between the Village and the
Trustee (the "Indenture"), which bonds are designated Mandatorily Exchangeable
Resource Recovery Revenue Bonds (▇▇▇▇▇▇▇ Resource Recovery Partners, L.P.
Project) Series 1999A (the "1999A Bonds"), Mandatorily Exchangeable Resource
Recovery Revenue Bonds (▇▇▇▇▇▇▇ Resource Recovery Partners, L.P. Project) Series
1999B (the "1999B Bonds"), Resource Recovery Revenue Bonds (▇▇▇▇▇▇▇ Resource
Recovery Partners, L.P. Project) Series 1999C (the "1999C Bonds") and Resource
Recovery Revenue Bonds (▇▇▇▇▇▇▇ Resource Recovery Partners, L.P. Project) Series
1999D (the "1999D Bonds" and, together with the 1999A, 1999B and 1999C Bonds,
hereinafter referred to collectively as the "1999 Bonds"), and which 1999 Bonds
are governed by the terms of the Indenture; and
WHEREAS, in order to secure the repayment of the 1999 Bonds, the
Village granted to the Trustee (pursuant to the Indenture) a lien on and
security interest in the Trust Estate (as
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defined in the Indenture), which included a mortgage on the Transfer
Station, all to the extent and subject to the terms and conditions provided
therein; and
WHEREAS, FW asserts that it advanced and loaned in excess of
$14,000,000 to the Operator in order to ensure that the Operator had sufficient
funds to continue to operate the Facility as required under the O&M Agreement;
and
WHEREAS, the advances and loans of such funds asserted by FW to the
Operator are evidenced by a Revolving Credit Demand Note, dated as of February
23, 2000, made by the Operator to FW (the "FW Note"), and FW asserts, are
secured pursuant to a Security Agreement, dated as of February 23, 2000, between
the Operator and FW (the "FW Security Agreement"), and FW has asserted a claim
against the Operator and the Partnership (as a result of the Operator's claim
against the Partnership) in excess of $14,000,000 for all such amounts so
advanced and loaned by FW to the Operator (the "FW Claim"); and
WHEREAS, the Partnership and the Village are plaintiffs in litigation
entitled ▇▇▇▇▇▇▇ RESOURCE RECOVERY PARTNERS, L.P. V. ▇▇▇▇▇, filed in the United
States District Court for the Northern District of Illinois (No. 96 C 1735), and
litigation entitled VILLAGE OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, filed in the Circuit Court of
▇▇▇▇ County, Illinois (No. 96 CH 12873, now No. 00 CH 3754) (collectively, the
"Retail Rate Litigation"); and
WHEREAS, pursuant to certain agreements, the Partnership assigned to FW
the right to control the Retail Rate Litigation and assigned the proceeds of the
Retail Rate Litigation to a certain trust for the benefit of the Trustee on
behalf of the holders of all of the 1999 Bonds (the "1999 Bondholders") and for
the benefit of FW; and
WHEREAS, the Partnership and the General Partner filed voluntary
petitions for relief pursuant to Chapter 11 of the United States Bankruptcy Code
(the "Bankruptcy Code") on
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August 25, 2000; and the Operator filed a voluntary petition for relief pursuant
to Chapter 11 of the Bankruptcy Code on November 7, 2000 (collectively, the
"Bankruptcy Cases"), each of which is pending in the United States Bankruptcy
Court for the Northern District of Illinois, Eastern Division (the "Bankruptcy
Court"); and
WHEREAS, the Debtors, the Bondholders and FW believe they each have
claims or causes of action against one another that they may assert in one or
more of the Debtors' bankruptcy proceedings or other proceedings; and
WHEREAS, the Debtors, the Bondholders and FW each desire to fully and
finally resolve (in accordance with the terms of this Agreement) any claims or
causes of action they may have against one another (other than those preserved
by the terms of this Agreement) in part to ensure the prompt sale of the
Facility (in whole or in part) and in conjunction with a plan of reorganization
for the Debtors;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
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1. SUPPLEMENTAL LETTER. The parties hereto have entered into a separate
letter agreement (the "Supplemental Letter") with respect to certain matters,
the public disclosure of which could adversely impact the settlement among the
parties (the "Settlement"). Accordingly, the Supplemental Letter will not be
filed with the Bankruptcy Court. If the Bankruptcy Court should require that the
Supplemental Letter be filed, it shall be filed under seal. The terms of the
Supplemental Letter are an integral part of the Settlement, are hereby
incorporated herein by reference thereto and made a part hereof.
2. FW FUNDING.
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2.1. FW agrees to fund, at the times set forth below, a creditors'
trust in an amount equal to the lesser of (i) twenty (20%) percent of the amount
of pre-petition, allowed unsecured claims asserted against any of the Debtors in
the Bankruptcy Cases ("Allowed Claims") (but specifically excluding any claims
entitled to administrative expense priority under 11 U.S.C. ss.ss.503 and
507(a)(1) and any FW Claim) or (ii) eight hundred thousand dollars ($800,000)
(the "Creditors Trust"). The Creditors Trust shall be funded on the earlier to
occur of (i) the first effective date of a plan of reorganization for the
Operator and the Partnership, or (ii) if no plan of reorganization is confirmed
for the Operator and the Partnership, thirty days after the entry of an order by
the Bankruptcy Court either converting the Debtors' bankruptcy cases to
proceedings under Chapter 7 of the Bankruptcy Code, or dismissing the Debtors'
bankruptcy cases.
2.2. In connection with the establishment and/or approval of any
Allowed Claims, the Debtors shall in good faith diligently review all claims
submitted and, where appropriate, object to the allowance of claims; provided,
however, that nothing contained in this
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Agreement shall be deemed to limit, modify or waive any and all rights of FW,
the Trustee or the Bondholders, if any, under applicable law to object to the
allowance of any claim.
2.3. All ballots that are sent to creditors in connection with
solicitations for any of the Debtors' plans of reorganization will contain or
incorporate a form of a written release and waiver of any and all claims which
holders of Allowed Claims have asserted or could assert against FW, FW's
Affiliates for any reason whatsoever, in form and substance satisfactory to FW
(the "FW Creditor Releases"), and require that holders of Allowed Claims
affirmatively indicate in writing on such ballot that their execution of such
ballot voting in favor of any such plan of reorganization constitutes their
acceptance and agreement to be bound by such FW Creditor Release in exchange for
payment from the Creditors Trust. Any holders of Allowed Claims that indicate on
such ballot their acceptance and agreement to be bound by such FW Creditor
Release shall be entitled to receive a distribution from the Creditors Trust in
an amount equal to the lesser of (i) twenty (20%) percent of such holder's
Allowed Claim or (ii) such holder's pro rata share of the funds in the Creditors
Trust. If on the first day following the last date provided in the plan of
reorganization for the payment of Allowed Claims, any undistributed funds remain
in the Creditors Trust, all such undistributed funds will be returned to FW free
and clear of any liens or encumbrances unless FW has failed to pay any amounts
then due and owing by FW under this Agreement, the Exit Funding Agreement (as
defined below), the IRS Closing Agreement (as defined below), the Supplemental
Letter or any cost of permanent closure of the Facility as contemplated by
Section 9 hereof, in which case such undistributed funds shall be applied to pay
such amounts. In the event less than all of the Debtors are able to confirm a
plan of reorganization, the parties hereto agree to reasonably cooperate with
each other to establish a
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mechanism generally consistent with this Section 2.3 for disbursing the funds in
the Creditors Trust in exchange for FW Creditor Releases.
3. DETERMINATION OF VALIDITY, PRIORITY AND EXTENT OF LIENS.
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In order to determine, among other things, the validity, priority and
extent of claims against the Trust Estate and FW's pre-petition and
post-petition claims against the Debtors, (i) as of the date hereof, the Trustee
shall assign certain of its Claims in the Trust Estate to the Partnership, to
the extent necessary and solely to consummate the Foreclosure Action (as defined
below), in accordance with the Assignment Agreement in the form attached hereto
as EXHIBIT 1 (the "Assignment Agreement") and (ii) immediately following such
assignment in accordance with clause (i), but not later than three (3) business
days after such assignment, the Partnership shall promptly file in the
Bankruptcy Court a Complaint in the Bankruptcy Cases in the form attached hereto
as EXHIBIT 2 (the "Foreclosure Action") seeking (a) to foreclose the
Partnership's interests in the Trust Estate, and (b) to determine the validity,
priority and extent of liens on the Trust Estate. The Trustee, the Bondholders,
the Debtors and FW agree to the entry of a Stipulation and Order in the form
attached hereto as EXHIBIT 3 (the "Priority Order") with respect to (b) above
and the Partnership shall promptly move for the entry of the Priority Order in
the Foreclosure Action.
4. EXIT PAYMENTS. Subject to the Priority Order becoming final and
non-appealable and the execution of the IRS Closing Agreement, FW reaffirms its
obligation, in accordance with the Exit Funding Agreement, dated as of October
15, 1999, between FW and the Trustee (as amended or modified, the "Exit Funding
Agreement"), to make Exit Payments (as defined in the Exit Funding Agreement)
for the benefit of the holders of 1999C Bonds and 1999D Bonds, and hereby
expressly agrees that FW's obligations under the Exit Funding Agreement
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including, but not limited to, its obligation to make Exit Payments thereunder
and payment of the 1999C and 1999D Bonds pursuant to Section 2 of the Exit
Funding Agreement shall be absolute, irrevocable and unconditional, and shall
not be subject to any reduction, limitation, impairment or termination for any
reason, including, without limitation, any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense or set-off,
counter-claim, recoupment or termination whatsoever by reason of the invalidity
or unenforceability of such obligation provided, however, that, notwithstanding
anything herein to the contrary, in the event any Bondholder breaches its
obligations under this Agreement and fails to cure such default after notice has
been given and the cure period expired all as contemplated by Section 28 below,
the reaffirmation of FW contained in this Section 4 shall be null and void and
of no further force or effect as to such breaching Bondholder, but only to the
extent FW is actually harmed by such breach.
5. BUDGET.
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5.1. By their execution hereof, the parties hereby confirm their
approval of the Debtors' budget, a copy of which is attached hereto as Annex A
(such budget, as the same may be updated and/or amended in accordance with the
terms hereof, is hereinafter referred to as the "Budget"). The Debtors will pay
their respective professional fees provided in the Budget and professional
expenses at a rate of 0% and 100%, respectively, with holdback fees to be paid
on the earlier of confirmation of a plan of reorganization or as otherwise
authorized by Bankruptcy Court order. In the event the Debtors' Bankruptcy Cases
are not resolved by June 15, 2002, the Debtors will continue to prepare and
submit updated draft six (6) month Budgets in a manner consistent with this
Agreement. No such updated Budget shall be effective, and the Debtors shall make
no expenditures under any such updated Budget until such updated Budget has been
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approved by the Bondholders Steering Committee and is reasonably satisfactory to
FW. No approved Budget can be otherwise altered or amended except by the written
consent of the Bondholders Steering Committee and FW or their respective
counsels.
5.2. The Debtors shall submit to the Bondholders Steering Committee and
FW monthly reports detailing all expenditures made during such month and setting
forth any variance in any such expenditure(s) from the Budget. Such reports
shall be submitted for each month no later than the 15th day of the following
month. Upon request of either the Bondholders Steering Committee or FW, the
Debtors shall promptly provide a detailed explanation of the reason for any line
item variance of 10% or more.
5.3. Subject to the restrictions on payment of professional fees and
expenses set forth in Section 5.1 hereof, the Debtors have full discretion to
incur expenses and make payments consistent with the Budget. The Debtors have no
authority to incur any expenses or to make payments except pursuant to the terms
of the Budget.
5.4. The parties hereto further agree that they will modify, or cause
to be modified, the Interim Order Authorizing Debtors in Possession To (A) Use
Cash Collateral and (B) Grant Liens and Administrative Claims Pursuant to 11
U.S.C. ss.ss.361, 363 and 507(b) entered on September 28, 2000 and made final on
October 17, 2000 (the "Cash Collateral Order") to delete paragraph 6 of the Cash
Collateral Order.
5.5. FW will not object to the Debtors' continued use of cash
collateral as long as such use is otherwise consistent with the Budget and this
Agreement.
6. IRS CLOSING AGREEMENT. It is agreed that the obligations of the
parties hereto are subject to the execution of a "Closing Agreement as to Final
Determination Covering Specific Matters" among the Village, FW and the
Commissioner of the Internal Revenue Service,
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substantially in the form attached hereto as EXHIBIT 4, the terms of which
all parties hereto accept, or such other form as FW and the Bondholders, in
their sole discretion, shall mutually agree (the "IRS Closing Agreement").
7. SALE OF PROJECT. Within three (3) business days of the date hereof,
the Debtors will promptly file with the Bankruptcy Court a motion to approve (i)
bid procedures, (ii) the sale of the Project (in whole or in part) and (iii)
related relief in the form attached hereto as EXHIBIT 5 (the "Sale Motion").
Promptly after approval of the Sale Motion by the Bankruptcy Court, Debtors
shall solicit proposals for the sale of the Project, in whole or in part, and
conduct an auction pursuant to the bidding procedures set forth in the Sale
Motion.
8. DISTRIBUTION OF SALES PROCEEDS.
------------------------------
8.1. The 1999 Bondholders have asserted and continue to assert a
first-position lien upon the Trust Estate. The parties hereto acknowledge that
FW is the only party in the Bankruptcy Cases that still retains the right to
dispute this lien, as all other creditors have allowed the time to dispute the
1999 Bondholders' lien to expire. In consideration for the agreements set forth
herein, including FW's agreement not to challenge the 1999 Bondholders' lien in
the Trust Estate or its proceeds and the entry of the Priority Order, FW shall
share in the 1999 Bondholders' lien position in Proceeds (as defined in Section
8.3 hereof) of the sale of the Project as set forth in Sections 8.2.2, 8.2.3 and
8.2.4 hereof. Except for the amounts reserved from the Proceeds for distribution
to creditors holding Allowed Administrative Claims (as hereinafter defined)
pursuant to Section 8.2.2 hereof, the Proceeds of the Trust Estate are subject
to the secured claims of the Trustee (on behalf of the 1999 Bondholders) and not
available for distribution to any creditors other than FW and the Trustee (on
behalf of the 1999 Bondholders).
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8.2. Upon the sale of the Project, in whole or in part, the Proceeds
from such sale shall be applied in the following amounts and order of priority:
8.2.1 First, Proceeds shall be distributed to the Debtors in an amount
necessary to pay any outstanding real estate taxes and to release any properly
filed and perfected mechanics liens filed against the Facility (other than rent
of any kind or nature due and owing to the Village), outstanding Village water
bills, and other allowed priority claims (other than Allowed Administrative
Claims (as defined in Section 8.2.2) pursuant to any confirmed plan of
reorganization of the Debtors or by the Bankruptcy Court, after having given
notice and opportunity for FW and the Bondholders Steering Committee to object
to the allowance thereof, in each case to the extent not assumed by the
purchaser or purchasers' of the Debtors' interest in the Project. Attached
hereto as Schedule A is a description prepared by the Debtors of the nature of
all such liens, claims or charges and the current amount due in connection with
all amounts to be paid pursuant to this Section 8.2.1.
8.2.2 Second, up to the next $1,750,000 of Proceeds shall be
distributed to the Debtors to pay such claims asserted against the Debtors
entitled to administrative expense priority under I I U.S.C. ss.ss.503 and
507(a)(1) and wind down expenses of the Debtors after confirmation of a plan of
reorganization as are consistent with the Budget and allowed in any confirmed
plan of reorganization or by the Bankruptcy Court, after having given notice and
opportunity for FW and the Bondholders Steering Committee to object to the
allowance thereof ("Allowed Administrative Claims"), in each case only to the
extent not assumed by the purchaser or purchasers of the Debtors' interest in
the Project. The amount of Proceeds to be distributed to pay such Allowed
Administrative Claims shall be equal to the difference between $1,750,000 and
the amount of Allowed Administrative Claims not able to be otherwise paid from
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the Debtors' estate. Any portion of such $1,750,000 that is not applied to the
payment of Allowed Administrative Claims ("Excess Reserve Funds") shall be
distributed as follows: 86% of all Excess Reserve Funds shall be distributed to
the Trustee (for distribution by the Trustee to the 1999 Bondholders) pursuant
to Section 8.2.4(b) hereof, and 14% of all Excess Reserve Funds shall be
distributed to the Trustee (for distribution by the Trustee to the holders of
1999C Bonds) and FW pursuant to Section 8.2.4(c) hereof.
8.2.3 Third, if the Proceeds are less than $10 million, the Debtors (or
an escrow agent mutually selected by FW and the Bondholders) will hold in escrow
an amount equal to the estimated funds to be refunded to the Debtors under the
TIF Act and the TIF Ordinance (as each such term is defined in the Indenture)
with respect to real estate taxes for the calendar years 2000 and 2001
(collectively, the "TIF Refunds") for a period of eighteen (18) months from the
effective date of any plan of reorganization. If any TIF Refunds are paid to
Debtors (for distribution to the Trustee and subsequent distribution to the 1999
Bondholders) within such eighteen (18) month period, Proceeds in an amount equal
to the actual amount of all TIF Refunds received during such period shall be
released promptly from escrow to FW (the "FW Refund"); PROVIDED, HOWEVER, that
the Trustee shall be entitled to be reimbursed first from the FW Refund for the
actual attorney fees and expenses paid by it in connection with the TIF
litigation, such reimbursement not to exceed $100,000. The balance of all
escrowed Proceeds, if any, shall be released to the Trustee (for distribution to
the 1999 Bondholders) pursuant to the Indenture at the earlier of (i) the end of
such period or (ii) the receipt of all TIF Refunds. If no TIF Refund is issued
within such eighteen (18) months, then the Proceeds held in such escrow by the
Debtors shall be released to the Trustee (for distribution to 1999 Bondholders)
pursuant to the Indenture.
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8.2.4 Fourth, the remaining Proceeds shall be distributed to FW and the
Trustee (for distribution by the Trustee to the 1999 Bondholders) in the
following amounts and order of priority:
(a) The first $1,000,000 shall be distributed to the Trustee for
application to the 1999C Bonds in accordance with the terms of the
Indenture and the IRS Closing Agreement until the 1999C Bonds
(including all accrued and unpaid interest thereon) have been paid in
full, and any remaining amount to FW.
(b) The next $2,000,000 (plus any Excess Reserve Funds distributed
to the Trustee pursuant to Section 8.2.2) shall be distributed to the
Trustee.
(c) The next $750,000 (plus any Excess Reserve Funds distributed
to the Trustee pursuant to Section 8.2.2) shall be distributed to the
Trustee for application to the 1999C Bonds in accordance with the terms
of the Indenture and the IRS Closing Agreement until the 1999C Bonds
(including all accrued and unpaid interest thereon) have been paid in
full, and any remaining amount to FW.
(d) The next $1,000,000 shall be distributed to the Trustee.
(e) The next $1,000,000 shall be distributed to the Trustee for
application to the 1999C Bonds in accordance with the terms of the
Indenture and the IRS Closing Agreement until the 1999C Bonds
(including all accrued and unpaid interest thereon) have been paid in
full, and any remaining amount to FW.
(f) The next $2,500,000 shall be (i) 1/2 distributed to the
Trustee for application to the 1999C Bonds in accordance with the terms
of the Indenture and the IRS Closing Agreement until the 1999C Bonds
(including all accrued and unpaid interest thereon) have been paid in
full, and any remaining amount to FW and (ii) 1/2 distributed to the
Trustee.
(g) The next $15,000,000 shall be distributed to the Trustee.
(h) The next $10,000,000 shall be (i) 1/3 distributed to the
Trustee for application to the 1999C Bonds in accordance with the terms
of the Indenture and the IRS Closing Agreement until the 1999C Bonds
(including all accrued and unpaid interest thereon) have been paid in
full, and any remaining amount to FW and (ii) distributed 2/3 to the
Trustee.
(i) All remaining Proceeds shall be distributed to the Trustee.
8.3. For purposes of this Agreement the term "Proceeds" shall mean all
cash and non-cash consideration received in connection with the sale, lease,
other disposition of all or
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any portion of the Debtors' interests in the Project (including, without
limitation, the assumption of indebtedness or other obligations, or any
contingent or future payments and the proceeds of any liquidation of the assets
of the Debtors), less the actual expenses (excluding any rent of any nature due
and owing to the Village and any amounts previously paid pursuant to Sections
8.2.1, 8.2.2 or 8.2.3) incurred by the Debtors in connection with the sale of
the Debtors' interest in the Project in an aggregate amount not in excess of
that contained in the Budget. With respect to contingent or future payments,
such amounts shall be deemed to be Proceeds for purposes of this Section 8 when
actually paid or converted into cash. In no event shall Prospective Retail Rate
Litigation Proceeds (as defined below) or the fact that interest payable on the
1999 Bonds is tax-exempt be deemed to be a benefit to the 1999 Bondholders
resulting in additional proceeds to the 1999 Bondholders for purposes of this
Section 8. The parties agree to reasonably cooperate in good faith to determine
the amount of Proceeds available for distribution pursuant to this Section 8,
and, as a general rule, the parties agree that any non-cash consideration which
does not ultimately result in a cash payment to any party hereto shall not be
deemed to be Proceeds for purposes of this Section 8.
9. LIQUIDATION CONTINGENCY.
-----------------------
9.1. Any plan of reorganization proposed by Debtors will provide for
liquidation of the assets of the Debtors, in whole or in part, if such assets
are not sold as contemplated by Section 7 hereof. In the event that the Debtors
are unable to sell the Project as contemplated by Section 7 hereof, and there is
instead a liquidation of their assets and a permanent closure of the Facility,
any proceeds received in the liquidation shall be applied first to fund the
costs for a permanent closure of the Facility as required by applicable law
(including, without limitation, any required environmental remediation or
clean-up); provided that in the
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case of a liquidation and permanent closure, nothing contained in this Agreement
shall be deemed to release FW from any liability or obligation that FW may have
to pay, or to reimburse, 1999 Bondholders for the costs of such permanent
closure of the Facility (including, without limitation, any required
environmental remediation or clean-up) whether such obligation is based on
contract (including, without limitation, pursuant to the Site Lease
Environmental Guaranty Agreement or the Laydown Site Lease Environmental
Guaranty Agreement (each as defined in the Indenture)) or at law. Any proceeds
remaining from the liquidation of the assets of the Debtors, after payment of
the costs of such permanent closure, shall be applied as set forth in Section
8.2.4 hereof. To the extent that FW pays any costs of the permanent closure
under this Section 9.1 which FW is not otherwise obligated to pay, or reimburse
the payment of, contractually or at law, such payments shall be reimbursed to FW
from liquidation proceeds prior to any distribution pursuant to Section 8.2.4
hereof.
9.2. In the event that no plan of reorganization is confirmed for any
one of the Debtors, (i) the Bondholders Steering Committee and the Trustee
shall, after consultation with FW, determine whether to petition for such
chapter 11 cases of the Debtors to be dismissed or converted to liquidation
proceedings pursuant to Chapter 7 of the Bankruptcy Code, whether the Facility
shall be abandoned pursuant to section 554 of the Bankruptcy Code, or whether
the Trustee shall exercise its rights under applicable state law regarding the
Debtors' assets following reassignment thereof to the Trustee pursuant to the
Assignment Agreement, (ii) except as contemplated by the Assignment Agreement
and the Foreclosure Action, the Trustee will take all actions necessary to
continue to preserve its liens on the assets of such Debtor constituting a
portion of the Trust Estate, and (iii) the proceeds of any liquidation of the
assets of such Debtor shall be distributed in accordance with Section 9.1
hereof.
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10. THE RETAIL RATE LITIGATION.
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10.1. Notwithstanding anything in this Agreement or any other documents
or agreements to the contrary, FW shall have the sole authority in its absolute
discretion to manage, prosecute, settle or dismiss the Retail Rate Litigation.
Nothing contained in this Agreement shall be deemed to alter or limit the terms
of that certain Joint Prosecution Agreement among certain of the parties hereto,
their counsel and financial advisors. FW confirms and agrees that it will be
solely liable and responsible for all costs and expenses relating to or arising
out of the Retail Rate Litigation.
10.2. FW hereby assigns to the Trustee any and all of its right, title
and interest in and to any and all Prospective Retail Rate Litigation Proceeds
(as defined below), all of which are hereby reserved to the Trustee.
10.3. FW, the Trustee and the Debtors hereby agree that in the event
that any proceeds, including without limitation, any lump-sum payment or
structured payments, as a result of or relating to any settlement or judgment
arising out of the Retail Rate Litigation (collectively, "Retrospective Retail
Rate Litigation Proceeds"), excluding and reserving for the benefit of the
Trustee, however, any and all proceeds, recoveries or value arising out of or
related to the operation of the Project or its assets, or any portion thereof,
from and after the date of any judgment in, or settlement of, the Retail Rate
Litigation (including, but not limited to, increased electric rates payable in
respect of the electrical power generated by the Project, favorable tax
treatment or tax rebates for the Project or the 1999 Bondholders, etc.)
(collectively, "Prospective Retail Rate Litigation Proceeds") are recovered, the
first $ 10 million of such Retrospective Retail Rate Litigation Proceeds (net of
attorney contingency fees (which shall not exceed fifteen percent (15%) of such
Retrospective Retail Rate Litigation Proceeds) and related expenses of
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any such attorney incurred and unpaid in connection therewith) shall be paid 50%
to FW and 50% to the Litigation Proceeds Trustee under the Litigation Trust (as
defined in the Indenture) for application under the Litigation Trust pursuant to
the Litigation Proceeds Trust Agreement (as defined in the Indenture). All
Retrospective Retail Rate Litigation Proceeds in excess of $10 million shall be
paid to the Litigation Proceeds Trustee under the Litigation Trust for
application pursuant to such Litigation Proceeds Trust Agreement; provided that
FW, the Partnership, the Trustee and the Litigation Proceeds Trustee agree that,
upon confirmation of a plan of reorganization for the Debtors, Section 6(a) of
the Litigation Trust Agreement shall be deemed amended in its entirety as
follows:
(a) Upon the earlier of the fifth day following receipt of
Litigation Proceeds or the fifth day of each calendar month (or the
next business day if such day is not a business day), the Litigation
Proceeds Trustee shall disburse any Litigation Proceeds in the Trust
Account to the Indenture Trustee (for deposit into the Revenue Fund)
and/or FW in the following order of priority:
(A) the Indenture Trustee shall receive an amount sufficient,
when aggregated with any other amounts held by the Indenture Trustee
that may be used for such purpose, to redeem all then Outstanding
1999D Bonds (including all accrued and unpaid interest thereon);
(B) FWC shall receive an amount equal to the aggregate amount
actually paid by it under the Exit Funding Agreement in respect of
the 1999D Bonds;
(C) FWC shall receive an amount equal to all of its actual
out-of-pocket costs and expenses (including, without limitation,
attorney fees) related to funding the Retail Rate Litigation,
without duplication of any amounts, including contingency fees,
previously paid to or for the benefit of FWC;
(D) the Indenture Trustee shall receive an amount sufficient,
when aggregated with any other amounts held by the Indenture Trustee
that may be used for such purpose, to redeem all then Outstanding
1999C Bonds (including all accrued and unpaid interest thereon);
-18-
(E) FWC shall receive an amount equal to a return of 10.6% per
annum compounded semi-annually on the sum of the amounts distributed
to FWC pursuant to clauses (B) and (C) above;
(F) the Indenture Trustee shall receive an amount equal to the
amount distributed to FWC pursuant to clause (B) above; provided,
that the Indenture Trustee shall not be entitled to any further
amounts under this clause (F) from and after the time that (1) the
amount of (i) Litigation Proceeds distributed to the Indenture
Trustee in accordance with this clause (F), plus (ii) the amount
(without duplication of amounts specified in sub-clause (i)) of all
repayments of principal theretofore made by the Indenture Trustee in
respect of the 1999A&B Bonds, plus (iii) all amounts (without
duplication of amounts specified in sub-clause (i)) held by the
Indenture Trustee that are permitted under the Second Amended
Indenture to be paid in respect of principal on the 1999A&B Bonds,
equals $207,000,000 plus any accrued and unpaid interest on the 1994
Bonds through the Initial Exchange Date (whether or not such amounts
were discharged in bankruptcy) to the extent that the amount of such
accrued and unpaid interest does not exceed the product of (1) the
amount of such accrued and unpaid interest and (2) a fraction, the
numerator of which is equal to 207 and the denominator of which is
equal to 320;
(G) FWC shall receive 20% of the Litigation Proceeds and the
Indenture Trustee shall receive 80% of the Litigation Proceeds;
provided, that the Indenture Trustee shall not be entitled to any
further amounts under this clause (G) from and after the time that
(1) the amount of (i) Litigation Proceeds distributed to the
Indenture Trustee in accordance with preceding clause (F) and this
clause (G), plus (ii) the amount (without duplication of amounts
specified in sub-clause (i)) of all repayments of principal
theretofore made by the Indenture Trustee in respect of the 1999A&B
Bonds, plus (iii) all amounts (without duplication of amounts
specified in sub-clause (i)) held by the Indenture Trustee that are
permitted under the Second Amended Indenture to be paid in respect
of principal on the 1999A&B Bonds, equals $207,000,000 plus any
accrued and unpaid interest on the 1994 Bonds through the Initial
Exchange Date (whether or not such amounts were discharged in
bankruptcy) to the extent that the amount of such accrued and unpaid
interest does not exceed the product of (1) the amount of such
accrued and unpaid interest and (2) a fraction, the numerator of
which is equal to 207 and the denominator of which is equal to 320;
and
(H) FW shall receive any further Litigation Proceeds."
10.4. Without limiting Section 14 hereof, the Debtors and the Bondholders will
cooperate in providing FW, at the cost of FW, with information and assistance
related to the
-19-
Retail Rate Litigation including, without limitation, providing
any appropriate releases, warrants of satisfaction or other documents that may
be reasonably necessary in connection with the settlement or other resolution of
the Retail Rate Litigation and using their respective reasonable best efforts to
cause any future owners or operators of the Project to do the same. FW agrees
that the Litigation Proceeds payable to the Indenture Trustee under Sections
10.3(a)(F) and 10.3(a)(G) above shall survive any termination of the Indenture
and cancellation of the 1999A and 1999B Bonds. If any distribution of Litigation
Proceeds is to be made under Section 10.3(a)(F) or 10.3(a)(G) after the
termination of the Indenture and the cancellation of the 1999A Bonds and 1999B
Bonds, the Litigation Proceeds Trustee agrees that it shall deliver such
Litigation Proceeds directly to holders of the 1999A and 1999B Bonds holding
such 1999A and 1999B Bonds on the date of confirmation of a Debtors plan of
reorganization or, if no plan of reorganization is confirmed, the date of
liquidation of the assets of the Debtors in a manner as consistent as possible
with the Sections 10.3(a)(F) and 10.3(a)(G) above.
11. RELEASE/DISCHARGE.
-----------------
11.1. Simultaneously with the execution of this Agreement, the parties
have executed and delivered the release agreements attached hereto as Annex B
and Annex C and incorporated herein by reference thereto (the "General
Releases"), which General Releases shall automatically become effective upon the
first date that all of the following shall have occurred (i) this Agreement is
approved by the Bankruptcy Court; (ii) the Priority Order is final and
non-appealable; and (iii) the IRS Closing Agreement is executed by all parties
thereto. In the event that FW breaches its obligations under Section 2 and 4
hereof, the Exit Funding Agreement, the IRS Closing Agreement, the Supplemental
Letter or any obligation to pay permanent closure costs as described in Section
9 (including, without limitation, any obligation that may exist
-20-
pursuant to the Site Lease Environmental Guaranty Agreement and the Laydown Site
Lease Environmental Guaranty Agreement) and fails to cure such default after
notice has been given and the cure period expired all as contemplated by Section
28 below, the General Releases for the benefit of FW shall be terminated and be
of no further force and effect but, with respect to breaches of any obligation
to pay permanent closure costs (including, without limitation, any obligation
that may exist pursuant to the Site Lease Environmental Guaranty Agreement
and/or the Laydown Site Lease Environmental Guaranty Agreement), only to the
extent that the Releasors (as defined in the General Releases) are actually
harmed by such breach. In the event that any party other than FW breaches any of
its obligations hereunder and fails to cure such default after notice has been
given and the cure period expired all as contemplated by Section 28 below, the
General Release for the benefit of such breaching party shall be terminated and
be of no further force or effect, but only to the extent FW is actually harmed
by such breach.
11.2. Any plan of reorganization proposed by any of the Debtors shall
contain or incorporate general waivers and releases by 1999 Bondholders in favor
of FW substantially similar in form, scope and substance to the General Releases
in favor of FW, and all ballots that are sent to creditors in connection with
solicitations for any of the Debtors' plans of reorganization will provide that
any vote by such 1999 Bondholder in favor of the such plan constitutes their
acceptance and agreement to be bound by the terms of such waiver and release.
12. INJUNCTION. The Debtors shall, in connection with the approval of
this Agreement by the Bankruptcy Court, seek the entry of a permanent injunction
against any claims or causes of action against FW directly or indirectly
relating to any of its respective actions or inaction with respect to the
Debtors, the Facility, the Project or the Transfer Station (the "Permanent
Injunction"). The Permanent Injunction sought will comport in form and substance
to the
-21-
language provided in Annex D attached hereto, and all of the parties to this
Agreement consent to the entry of such Permanent Injunction.
13. COURT APPROVAL. The parties hereto acknowledge that the approval of
the Agreement is a condition subsequent to the continued effectiveness of this
Agreement and that the Debtors, FW and the Bondholders shall promptly use their
best efforts to cause the Bankruptcy Court to approve this Agreement.
14. COOPERATION. Without limiting the provisions of Section 14 hereof,
the parties will cooperate in fulfilling the terms and conditions of this
Agreement, which acts of cooperation will include, but are not limited to, the
following:
14.1. The Debtors shall make all efforts to sell the Debtors' interests
in the Project as soon as practicable. To the extent necessary to market and
close any such transaction with respect to any or all parts of the Debtors'
interests and/or Project, FW agrees to provide the Debtors with reasonable
access to its documents and its personnel (including Messrs. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇) for information related to the Facility
and the Project and unavailable to Debtors' through other reasonable means. Such
access shall be subject to reasonable prior notice to FW and FW's reasonable
operational and other business needs so as not to unduly interfere with FW's
normal conduct of its business and operations. FW shall identify an employee who
shall serve as a coordinator for such purpose. Initially, such coordinator shall
be ▇▇. ▇▇▇▇▇▇▇▇▇, and none of the Debtors or any of their Related Persons shall
communicate directly with any of FW's personnel without prior consultation with,
and approval from, such coordinating person(s). FW disclaims any representations
as to the accuracy of any information furnished, and all other parties hereto
hereby release and the Debtors agree to indemnify (as an administrative expense
of the Debtors) FW, its Affiliates and their respective
-22-
Related Persons from and against any and all liabilities, penalties, fines,
damages, demands, claims, causes of action, suits, judgements, costs and
expenses (including reasonable attorneys' fees and disbursements) arising from
the inaccuracy of information provided by FW in connection with this paragraph;
provided, that such information was not furnished in bad faith. The Debtors
further agree that as a condition precedent to the distribution to third parties
("Potential Purchasers") of information relating to the Project, the Debtors
shall use their reasonable best efforts to cause Potential Purchasers to
disclaim (through legends contained in any selling memorandum or otherwise) any
reliance on FW or any information provided by or related to any of them, such
disclaimer to be in form and substance reasonably satisfactory to FW. FW
acknowledges that the disclaimers set forth in the Confidential Selling
Memorandum distributed to prospective purchasers on or about March 26, 2001 are
satisfactory with respect to such Confidential Selling Memorandum.
14.2. The Debtors will promptly develop, propose to the Bankruptcy
Court one or more plan(s) of reorganization for each of the Debtors
substantially consistent in all respects with this Agreement. The Debtors shall
consult with and furnish the Bondholders Steering Committee and FW and their
respective counsel drafts of such plan(s) of reorganization for review and
comment prior to submission thereof to the Bankruptcy Court, and shall promptly
furnish the Bondholders Steering Committee and FW and their respective counsel
with copies of all documents filed or submitted to the Bankruptcy Court in
connection therewith. FW and the Bondholders shall not oppose any plan of
reorganization that is consistent with the terms of this Agreement. FW and the
Bondholders shall (i) consent to the extension of the time period within which
the Debtors shall have the exclusive right to file any plan of reorganization
and solicit acceptances thereto (until January 31, 2002 with respect to
solicitation), and (ii) not oppose
-23-
approval of a disclosure statement in connection with any such plan and
confirmation of any such plan provided that any such plan of reorganization is
consistent with this Agreement and further provided that FW or the Bondholders
shall not be barred from objecting to such disclosure statement in connection
with any such plan on the grounds, and to the extent, that such document
contains a misstatement of, or omits to state, a material fact or is
inconsistent with this Agreement. In furtherance of, and without limiting the
foregoing, each Bondholder agrees that:
(a) it (x) will vote (or cause to be voted) its claims in respect
of the principal amount of the 1999 Bonds set forth under such
Bondholder's name on the signature pages hereto (the "Relevant 1999
Bonds") to accept such plan(s) of reorganization and take (or cause to
be taken) such other actions as may be required in connection therewith
and (y) not change or withdraw (or cause to be changed or withdrawn)
such vote(s), provided that the terms of such plan(s) of reorganization
are consistent with the terms of this Agreement; and
(b) it will not sell, transfer, pledge or assign any of the
Relevant 1999 Bonds or any voting interests therein during the
effectiveness of this Agreement, except to another Bondholder or an
assignee that agrees in writing prior to such acquisition, pledge or
assignment to be bound by all terms of this Agreement as if such
assignee had originally executed this Agreement with respect to the
Relevant 1999 Bonds being acquired by such assignee in the form
attached hereto as Annex E, and any sale, transfer or assignment of any
of the Relevant 1999 Bonds or any voting interests therein that is not
in compliance with the provisions hereof shall be void ab initio.
14.3. The Debtors, the Bondholders and the Trustee shall use their best
efforts to cause any and all existing agreements relating to the Project to be
amended and/or terminated consistent in all respects with the Debtors' confirmed
plan of reorganization.
14.4. The Debtors and FW will cooperate with respect to the Debtors'
Year 2000 tax returns. FW will prepare the Year 2000 tax returns for the Debtors
and calculate the appropriate allocation of income and loss items between FW and
the Debtors, subject to the Debtors' approval, such approval not to be
unreasonably withheld. The Debtors shall cooperate
-24-
in all respects with such preparation and, along with FW, shall execute and file
the Year 2000 tax returns prepared by FW.
14.5. FW agrees that it shall be solely responsible for all costs and
expenses (including reasonable attorneys' fees and expenses) of the Debtors
related to the preparation and solicitation of any Debtor's plan(s) of
reorganization and disclosure statements for the Debtors required by Section
14.2; provided that such amount shall not exceed $200,000 and shall be payable
by FW on the filing date of the Debtors' plan of reorganization.
-25-
15. FURTHER ASSURANCES. The Debtors, FW, the Bondholders and the
Trustee shall, from time to time, prepare, execute and deliver any and all
agreements or documents and take any and all other actions as may be reasonably
necessary, appropriate or advisable to effectuate the provisions and intent of
this Agreement. The Debtors and the Bondholders will cooperate with and support
FW's efforts to obtain the Village's execution and delivery of the IRS Closing
Agreement, which cooperation shall include supporting FW in connection with its
adversary complaint entitled ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLC V. VILLAGE OF ▇▇▇▇▇▇▇, 01 A
00973, pending in the Bankruptcy Court and FW's motion for entry of a temporary
restraining order and preliminary injunction, or for an expedited hearing on the
merits and its motion to hold defendant in contempt of court for its failure to
comply with the court's 9/25/01 order and request for immediate hearing on its
motion for TRO, preliminary injunction and other relief; provided that the
Debtors and the Bondholders shall not be required to take any action which, in
the sole discretion of the Debtors, the Bondholders, as the case may be, or
their respective counsel, could result in any liability to the Debtor or the
Bondholders.
16. REPRESENTATIONS OF BONDHOLDERS. Each Bondholder represents
severally and not jointly to FW that, as of the date of this Agreement:
(a) it has the sole ability to vote or cause to be voted no less
than the principal amount of its Relevant 1999 Bonds;
(b) it has valid title to its Relevant 1999 Bonds, free and clear
of all liens, security interests and other encumbrances of any kind,
other than liens, security interests and encumbrances which would not
prevent it from performing its obligations under this Agreement and the
General Releases; and
(c) it is a sophisticated investor with sufficient knowledge and
experience to evaluate properly the terms and conditions of this
Agreement, the General Releases and the Supplemental Letter, it has
made its own analysis and decision to enter into this Agreement and the
General Releases it has obtained such independent advice in this regard
as it deemed appropriate, it is an "Accredited Investor" as such term
is defined in Rule 501 (a) of Regulation D under
-26-
the Securities Act of 1933, as amended, and it has not relied in its
analysis or decision on any other person other than its own independent
advisors.
17. REPRESENTATIONS OF FW. FW represents to the Bondholders that, as of
the date of this Agreement:
(a) FW has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement, the Exit
Funding Agreement, the General Releases and the Supplemental Letter;
(b) this Agreement, the Exiting Funding Agreement, the IRS Closing
Agreement the General Releases and the Supplemental Letter have each
been duly and validly authorized by FW;
(c) the execution, delivery and performance by FW of this
Agreement, the Exiting Funding Agreement, the General Releases, the IRS
Closing Agreement, and the Supplemental Letter will not conflict with
or constitute a default under (i) the certificate of incorporation or
bylaws of FW, (ii) the terms or provisions of any indenture, mortgage,
deed of trust, contract or other agreement to which FW is a party, or
(iii) any statute, judgment, order or regulation applicable to FW; and
(d) FW and none of its Affiliates now own or have the right to
acquire through any agreement or contract, any of the 1999 Bonds.
18. ENFORCEABILITY. The terms of this Agreement shall be fully
enforceable by the Bankruptcy Court or other forum contemplated by
Section 28 hereof.
19. BINDING AGREEMENT; COUNTERPARTS; EFFECTIVENESS OF AGREEMENT.
This Agreement is binding upon, and shall inure to the benefit of, the
parties hereto and their respective representatives, successors and
permitted assigns. Nothing in this Agreement, express or implied, is
intended to confer on any person or entity other than the parties
hereto or their respective successors or permitted assigns any rights,
remedies, obligations or liabilities under or by reason of this
Agreement. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which taken
together shall constitute one and the same agreement. This Agreement,
the General Releases and the Supplemental Letter shall not become
effective and binding on the parties hereto unless and until
counterparts
-27-
signature pages shall have been executed and delivered by (i) FW, (ii) the
Debtors, (iii) the Trustee and (iv) the undersigned Bondholders. The parties
hereto acknowledge that upon such execution and delivery, this Agreement, the
General Releases, and the Supplemental Letter shall be deemed effective
according to the terms hereof and thereof as of the date first set forth above;
provided, however, that notwithstanding anything to the contrary contained
herein, in the event that the Bankruptcy Court denies its approval of this
Agreement, or does not grant its approval of this Agreement and issue the
Permanent Injunction within 60 days from the execution of this Agreement, this
Agreement, the General Releases, and the Supplemental Letter shall thereupon be
of no validity, force and effect and shall be deemed void ab initio without any
effect on the rights, obligations and claims of the parties hereto prior to the
execution hereof.
20. SEVERABILITY. If any provision or portion of this Agreement is
determined to be invalid, void or unenforceable by a court of competent
jurisdiction, such determination shall not affect the remaining provisions of
this Agreement, all of which shall remain in full force and effect. Any
provision or portion of this Agreement determined to be invalid, void or
unenforceable by a court of competent jurisdiction shall be deemed severed from
this Agreement, and if such severed provision or portion is material the parties
hereto shall negotiate in good faith amendments to this Agreement in order to
effectuate the original intent of the parties as closely as possible.
21. COMPLETE AGREEMENT. This Agreement, together with the Supplemental
Letter and all Annexes hereto, contains the complete understanding between the
parties hereto with respect to the subject matter thereof and shall, as of the
date hereof, supercede all other agreements and communications, whether they are
written or oral, between the parties concerning this subject matter (including,
but not limited to, that certain Global Settlement Term
-28-
Sheet executed on or about March 7, 2001 by counsel for FW, the Debtors and the
Bondholders). The Annexes and Exhibits attached hereto are incorporated herein
by reference, made a part hereof and are included with the definition of the
term "Agreement" for all purpose hereof, including without limitation, the
provisions of Section 18.
22. WAIVER/MODIFICATION. No waiver or modification of this Agreement or
any covenant, condition or limitation herein contained shall be valid and no
evidence of waiver or modification shall be offered or received in evidence in
any proceeding or litigation between the parties hereto arising out of or
affecting this Agreement or the rights or obligations of the parties hereunder,
unless such waiver or modification is in writing duly signed by the party to be
charged with such waiver or modification. Any waiver by any party hereto of any
provision or condition of this Agreement or breach thereof or any extension of
time granted by any party under this Agreement shall not be construed or deemed
to be a waiver of any other provision or condition of this Agreement or breach
thereof or extension of time with respect thereto or a waiver of a subsequent
breach of or subsequent extension of time with respect to the same provision or
condition.
23. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Illinois in all respects, without
giving effect to the conflicts of law principles thereof.
24. SINGULAR AND PLURAL; "AFFILIATE" AND "RELATED PERSONS". For
purposes of this Agreement, unless the context requires otherwise, words
importing the singular shall include the plural and vice versa. The term
"Affiliate", when used with respect to any person or entity, shall mean all
persons or entities controlling, controlled by or under common control with such
person or entity, with "control" being the power to direct the management,
policies or actions of a
-29-
person or entity, whether by equity ownership, contract, family relationship or
otherwise. The term "Related Persons", when used with respect to any person,
entity or Affiliate thereof, shall include each of their present, former or
future trustees, administrators, stockholders, partners, members, directors,
managers, officers, employees, agents, contractors, attorneys, advisors and
representatives and other persons or entities acting on their behalf.
25. ASSIGNMENT. Neither this Agreement nor any rights nor obligations
hereunder (other than with respect to FW or any Bondholder, the right to receive
the payment of money) may be assigned by any party hereto without the express
written consent of the other parties and any attempted assignment in violation
thereof shall be null and void; provided, however, that nothing contained herein
shall be deemed to prohibit any assignment of this Agreement by operation of law
as a result of any merger or consolidation or similar transaction so long as the
surviving or successor entity remains bound by all of the provisions of this
Agreement.
26. CAPTIONS AND HEADINGS. The captions, section and other headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
27. CONSTRUCTION. The parties hereto hereby acknowledge and agree that
they and their respective counsel have independently reviewed and had the
opportunity to make amendments to this Agreement and that the normal rule of
construction, whereby ambiguities are to be resolved against the drafting party,
shall be inapplicable to this Agreement.
28. CONSENT TO JURISDICTION/SERVICE OF PROCESS. Debtors, FW, the
Trustee and the Bondholders, both individually and collectively as the
Bondholder Steering Committee, hereby consent to the jurisdiction of the
Bankruptcy Court, or, if the Bankruptcy Court refuses to accept jurisdiction,
any federal court in the Southern District of New York in connection with any
-30-
action, suit or other proceeding arising out of or relating to this Agreement or
any action taken or omitted hereunder, and waive any claim of forum non
conveniens or objection to venue. In the event of a default or breach under the
Agreement, the non-defaulting party or parties shall send a written notice of
default to the defaulting party, notifying them of the default and providing
them with a ten (10) day cure period. Upon expiration of such cure period, if
such default is not cured to the reasonable satisfaction of the non-defaulting
party or parties such party or parties may exercise any rights and remedies
pursuant to this Agreement. With respect to any notice of default, action or
suit commenced pursuant to this provision, FW agrees that service by registered
mail, return receipt requested postage prepaid, on FW at its corporate
headquarters ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
attention General Counsel, shall be deemed to be good and effective service.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of date first above written.
▇▇▇▇▇▇▇ RESOURCE RECOVERY
PARTNERS, L.P.
By:/S/HOBART ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Name:
Title:
RRRP ▇▇▇▇▇▇▇, INC.
By:/S/HOBART ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Name:
Title:
-▇▇-
▇▇▇▇ ▇▇▇▇▇▇▇▇, LLC
By:/S/HOBART ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Name:
Title:
-32-
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLC (as successor by
merger to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corporation)
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Manager and Vice President
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇, as Trustee
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: First Vice President
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ TAX-
FREE INCOME FUND
Holder of 1999A Bonds,
1999B Bonds, 1999C Bonds
and 1999D Bonds in the
principal amount of
$72,729M $28,459M, $35,000M
and $22,651M, respectively.
By: /S/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: AVP
-35-
By:
-----------------------------------
Name:
Title:
Title: Vice President
-36-
▇▇▇▇▇ ▇▇▇▇▇ MANAGEMENT
Holder of 1999A Bonds,
1999B Bonds, 1999C Bonds
and 1999D Bonds in the
principal amount of
$14,554,687, $5,695,313
$11,686,780 and $4,533,035,
respectively.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
-37-
PRUDENTIAL MUTUAL FUND
INVESTMENT MANAGEMENT
Holder of 1999A Bonds,
1999B Bonds, 1999C Bonds
and 1999D Bonds in the
principal amount of
$5,031,250 $1,968,750
$4,039,876 and $1,566,975
respectively.
By: /S/▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
-38-
▇▇▇ ▇▇▇▇▇▇ TAX FREE HIGH INCOME FUND*
Holder of 1999A Bonds,
1999B Bonds, 1999C Bonds
and 1999D Bonds in the
principal amount of
$3,953,000 $1,547,000, $0
and $0, respectively.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
*As provided for in Section 8.1 of the
Agreement and Declaration of Trust of
the ▇▇▇ ▇▇▇▇▇▇ Tax Free `Trust (the
"Trust") dated as of May 10, 1995 an r
amended (under which the Trust is
organized as a business trust under the
laws of the State of Delaware and the
▇▇▇ ▇▇▇▇▇▇ Tax Free High Income Fund
(the "`Series") is organized as series
of the Trust), the shareholders,
trustees, officers, employees, and other
agents of the Trust and the Series shall
not personally be bound by or liable for
the matters set for hereunder, nor shall
resort be had to their private property
for the satisfaction of any obligation
or claim hereunder. A Certificate of
Trust referring to the Agreement and
Declaration of Trust of the Trust is on
file with the Secretary of State of
Delaware.
-▇▇-
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ INCOME FUND
Holder of 1999A Bonds,
1999B Bonds, 1999C Bonds
and 1999D Bonds in the
principal amount of
3,773,000 $1,477,000 $0 and
$0, respectively.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
*As provided for in Section 8.1 of the
Agreement and Declaration of Trust of
the ▇▇▇ ▇▇▇▇▇▇ Tax Free Trust (the
"Trust") dated as of May 10, 1995 and
further amended (under which the Trust
is organized as a business trust under
the laws of the State of Delaware and
the ▇▇▇ ▇▇▇▇▇▇ Municipal Income Fund
(the "Series") is organized as series of
the Trust), the shareholders, trustees,
officers, employees, and other agents of
the Trust and the Series shall not
personally be bound by or liable for the
matters set forth hereunder, nor shall
resort be had to their private property
for the satisfaction of any obligation
or claim hereunder. A Certificate of
Trust referring to the Agreement and
Declaration of Trust of the Trust is on
file with the Secretary of State of
Delaware.
-▇▇-
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ FUND*
Holder of 1999A Bonds,
1999B Bonds, 1999C Bonds
and 1999D Bonds in the
principal amount of
$1,473,000, $577,000, $0
and $0, respectively.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
*As provided for in Section 8.1 of the
Agreement and Declaration of Trust of
the ▇▇▇ ▇▇▇▇▇▇ Tax-Exempt Trust (the
"Trust") dated as of May 10, 1995, as
amended and restated as of June 21, 1995
and subsequently amended (under which
the Trust is organized as a business
trust under the laws of the State of
Delaware- and the ▇▇▇ ▇▇▇▇▇▇ High Yield
Municipal Fund (the "Series") is
organized as series of the Trust), the
shareholders, trustees, officers,
employees, and other agents of the Trust
and the Series shall not personally be
bound by or liable for the matters set
forth hereunder, nor shall resort be had
to their private property for the
satisfaction of any obligation or claim
hereunder. A Certificate of Trust
referring to the Agreement and
Declaration of Trust of the Trust is on
file with the Secretary of State of
Delaware.
-41-
▇▇▇ ▇▇▇▇▇▇ INVESTMENT
GRADE MUNICIPAL TRUST*
Holder of 1999A Bonds,
1999B Bonds, 1999C Bonds
and 1999D Bonds in the
principal amount of
$180,000, $70,000, $0 and
$0 respectively.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
*As provided for in Section 5.5 of the
Declaration of Trust as amended of the
▇▇▇ ▇▇▇▇▇▇ Investment Grade Municipal
Trust (the "Trust") (under which the
Trust is organized as an unincorporated
business trust under the laws of the
Commonwealth of Massachusetts), the
shareholders, trustees, officers,
employees and other agents of the Trust
shall not personally be bound by or
liable for the matters set forth herein,
nor shall resort be had to their private
property for the satisfaction of any
obligation or claim hereunder.
-42-
ATTACHMENTS
Annex A Budget by Debtors
Annex B Release by FW
Annex C Release by Partnership, General Partner, Operator,
Trustee and Bondholder Steering Committee
Annex D Permanent Injunction
Annex E Bondholder Transfer Agreement
Exhibit 1 Form of Assignment Agreement
Exhibit 2 Form of Foreclosure Action Complaint
Exhibit 3 Form of Priority Order
Exhibit 4 Form of IRS Closing Agreement
Exhibit 5 Form of Sale Motion
Schedule A Allowed Priority Claims (other than Allowed
Administrative Claims)
