CREDIT AGREEMENT
DATED AS OF MARCH 10, 2004
AMONG
COVANTA ENERGY CORPORATION
AND
EACH OF ITS SUBSIDIARIES PARTY HERETO,
THE LENDERS LISTED HEREIN,
AS LENDERS,
BANK OF AMERICA, N.A.,
AS ADMINISTRATIVE AGENT,
AND
DEUTSCHE BANK SECURITIES, INC.
AS DOCUMENTATION AGENT
BANK OF AMERICA, N.A.
AND
DEUTSCHE BANK SECURITIES, INC.
AS CO-LEAD ARRANGERS
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS........................................................................ 1
1.1 Certain Defined Terms.................................................................... 1
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement....... 34
1.3 Other Definitional Provisions and Rules of Construction.................................. 35
SECTION 2. AMOUNT OF COMMITMENTS; CERTAIN TERMS OF PAYMENT AND REPAYMENT...................... 35
2.1 Letter of Credit Commitments; Register; Default Rate; Computation of Interest;
Maximum Rate............................................................................. 35
2.2 Fees..................................................................................... 36
2.3 Mandatory Payments, Reductions in Commitments; General Provisions Regarding Payments;
Application of Proceeds of Collateral.................................................... 37
2.4 Increased Costs; Taxes; Capital Adequacy................................................. 41
2.5 Statement of Lenders; Obligation of Lenders and Issuing Lenders to Mitigate.............. 45
2.6 Defaulting Lender........................................................................ 46
2.7 Joint and Several Liability; Payment Indemnifications.................................... 47
2.8 Rights of Subrogation, Contribution, Etc................................................. 48
SECTION 3. LETTERS OF CREDIT.................................................................. 49
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein............ 49
3.2 Letter of Credit Fees.................................................................... 51
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit....................... 52
3.4 Obligations Absolute..................................................................... 54
3.5 Nature of Issuing Lenders' Duties........................................................ 55
3.6 Cash Collateral for Letters of Credit.................................................... 56
SECTION 4. CONDITIONS TO CLOSING DATE......................................................... 57
4.1 Conditions to Closing Date............................................................... 57
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES........................................... 68
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries............ 68
5.2 Authorization of Borrowing, etc.......................................................... 69
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TABLE OF CONTENTS
(continued)
PAGE
5.3 Financial Condition...................................................................... 70
5.4 No Material Adverse Change; No Restricted Payments....................................... 71
5.5 Title to Properties; Liens; Real Property; Intellectual Property......................... 71
5.6 Litigation; Adverse Facts................................................................ 72
5.7 Payment of Taxes......................................................................... 72
5.8 Performance of Agreements; Material Contracts............................................ 72
5.9 Governmental Regulation.................................................................. 73
5.10 Securities Activities.................................................................... 73
5.11 Employee Benefit Plans................................................................... 73
5.12 Certain Fees............................................................................. 74
5.13 Environmental Protection................................................................. 75
5.14 Employee Matters......................................................................... 75
5.15 Matters Relating to Collateral........................................................... 76
5.16 Disclosure............................................................................... 77
5.17 Cash Management System................................................................... 77
5.18 Matters Relating to Credit Parties....................................................... 77
5.19 Investigation............................................................................ 78
5.20 Matters Relating to Bankruptcy Proceedings............................................... 78
5.21 Subordinated Indebtedness................................................................ 78
5.22 Reporting to IRS......................................................................... 78
5.23 Solvency................................................................................. 79
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS.................................................... 79
6.1 Financial Statements and Other Reports................................................... 79
6.2 Existence, etc........................................................................... 84
6.3 Payment of Taxes and Claims; Tax......................................................... 84
6.4 Maintenance of Properties; Insurance; Application of Net Insurance/ Condemnation
Proceeds................................................................................. 85
6.5 Inspection Rights; Lender Meeting........................................................ 87
6.6 Compliance with Laws, etc................................................................ 87
6.7 Environmental Matters.................................................................... 87
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TABLE OF CONTENTS
(continued)
PAGE
6.8 Execution of Borrower Joinder Agreement and Personal Property Collateral Documents
After the Closing Date................................................................... 89
6.9 Matters Relating to Additional Real Property Collateral.................................. 91
6.10 Deposit Accounts......................................................................... 91
6.11 Further Assurances....................................................................... 92
6.12 High Yield Notes......................................................................... 93
6.13 Most Favored Nations Payments............................................................ 93
SECTION 7. BORROWERS' NEGATIVE COVENANTS...................................................... 93
7.1 Indebtedness............................................................................. 94
7.2 Liens and Related Matters................................................................ 97
7.3 Investments; Acquisitions................................................................ 100
7.4 Contingent Obligations; Performance Guaranties........................................... 102
7.5 Restricted Payments...................................................................... 105
7.6 Financial Covenants...................................................................... 106
7.7 Restriction on Fundamental Changes; Asset Sales.......................................... 109
7.8 Transactions with Shareholders and Affiliates............................................ 111
7.9 Restriction on Leases.................................................................... 111
7.10 Detroit Project Covenants................................................................ 112
7.11 Conduct of Business...................................................................... 112
7.12 Amendments to Related Agreements, Debt Documentation and Organizational Documents........ 112
7.13 End of Fiscal Years; Fiscal Quarters..................................................... 113
7.14 Amendment to Pension Plans............................................................... 113
SECTION 8. EVENTS OF DEFAULT.................................................................. 114
8.1 Failure to Make Payments When Due........................................................ 114
8.2 Default in Other Agreements.............................................................. 114
8.3 Breach of Certain Covenants.............................................................. 114
8.4 Breach of Warranty....................................................................... 115
8.5 Other Defaults Under Credit Documents.................................................... 115
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc..................................... 115
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc....................................... 115
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TABLE OF CONTENTS
(continued)
PAGE
8.8 Judgments and Attachments................................................................ 116
8.9 Dissolution.............................................................................. 116
8.10 Employee Benefit Plans................................................................... 116
8.11 Material Adverse Effect.................................................................. 117
8.12 Change in Control........................................................................ 117
8.13 Invalidity of Intercreditor Agreement; Failure of Security; Repudiation of Obligations... 117
8.14 Termination of Material Contracts........................................................ 117
8.15 NOL Treatment............................................................................ 117
SECTION 9. ADMINISTRATIVE AGENT............................................................... 118
9.1 Appointment.............................................................................. 118
9.2 Powers and Duties; General Immunity...................................................... 119
9.3 Independent Investigation by Lenders; No Responsibility For Appraisal of
Creditworthiness......................................................................... 120
9.4 Right to Indemnity....................................................................... 121
9.5 Successor Agents......................................................................... 121
9.6 Intercreditor Agreement.................................................................. 122
9.7 Administrative Agent May File Proofs of Claim............................................ 122
SECTION 10. MISCELLANEOUS...................................................................... 123
10.1 Successors and Assigns; Assignments and Participations in Letters of Credit.............. 123
10.2 Expenses................................................................................. 127
10.3 Indemnity................................................................................ 128
10.4 Set-Off.................................................................................. 129
10.5 Ratable Sharing.......................................................................... 129
10.6 Amendments and Waivers................................................................... 130
10.7 Independence of Covenants................................................................ 131
10.8 Notices; Effectiveness of Signatures..................................................... 132
10.9 Survival of Representations, Warranties and Agreements................................... 132
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.................................... 133
10.11 Marshalling; Payments Set Aside.......................................................... 133
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TABLE OF CONTENTS
(continued)
PAGE
10.12 Severability............................................................................. 133
10.13 Obligations Several; Independent Nature of Lenders' Rights; Damage Waiver................ 133
10.14 Release of Security Interest............................................................. 134
10.15 Headings................................................................................. 134
10.16 Applicable Law........................................................................... 134
10.17 Construction of Agreement................................................................ 135
10.18 Consent to Jurisdiction and Service of Process........................................... 135
10.19 Waiver of Jury Trial..................................................................... 136
10.20 Confidentiality.......................................................................... 136
10.21 Release of Parties; Waivers.............................................................. 137
10.22 No Fiduciary Duty........................................................................ 138
10.23 Counterparts; Effectiveness.............................................................. 138
10.24 No Third Party Beneficiaries............................................................. 138
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EXHIBITS
I [INTENTIONALLY OMITTED]
II [INTENTIONALLY OMITTED]
III FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT
IV FORM OF CLOSING DATE LETTERS OF CREDIT
V FORM OF COMPLIANCE CERTIFICATE
VI FORM OF ASSIGNMENT AGREEMENT
VII FORM OF SECURITY AGREEMENT
VIII FORM OF BORROWER JOINDER AGREEMENT
IX FORM OF SOLVENCY CERTIFICATE
X FORM OF OPINIONS OF CREDIT PARTIES' COUNSEL
XI FORM OF DHC PLEDGE AGREEMENT
XII [INTENTIONALLY OMITTED]
XIII FORM OF INTERCREDITOR AGREEMENT
XIV FORM OF MORTGAGE
XV [INTENTIONALLY OMITTED]
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SCHEDULES
1.1A DIP TRANCHE A L/Cs AND DIP TRANCHE X X/Cs
1.1B PRINCIPAL LEASE, SERVICE AND OPERATING AGREEMENTS
1.1C BUDGET
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
2.3A(i)(f) RESTRICTED ACCOUNTS
4.1C CORPORATE STRUCTURE
4.1N CLOSING DATE MORTGAGED PROPERTIES
4.1P CASH MANAGEMENT SYSTEM
5.1 COMPANY AND SUBSIDIARIES
5.5B REAL PROPERTY
5.5C INTELLECTUAL PROPERTY
5.6 LITIGATION
5.8A CERTAIN ALLEGED DEFAULTS
5.8C MATERIAL CONTRACTS
5.11 MATTERS RELATING TO EMPLOYEE BENEFIT PLANS
5.13 ENVIRONMENTAL MATTERS
7.1(vi) CERTAIN EXISTING INDEBTEDNESS
7.1(ix) CERTAIN EXISTING CAPITAL LEASES
7.2 CERTAIN EXISTING LIENS
7.3(v) CERTAIN EXISTING INVESTMENTS
7.3(vi) CERTAIN WTE PROJECTS
7.4(iv) CERTAIN EXISTING PERFORMANCE GUARANTIES
7.4(vi) CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.6G STIPULATED ADJUSTED EBITDA
7.8 CERTAIN TRANSACTIONS WITH AFFILIATES
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COVANTA ENERGY CORPORATION
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of March 10, 2004 and
entered into by and among COVANTA ENERGY CORPORATION, a Delaware corporation
("COMPANY"); EACH OF COMPANY'S SUBSIDIARIES LISTED ON THE SIGNATURE PAGES HEREOF
(each such Subsidiary and Company individually referred to herein as a
"BORROWER" and, collectively (together with any Additional Subsidiary Borrowers
(this and other capitalized terms used in the recitals hereto without definition
being used as defined in subsection 1.1)), on a joint and several basis, as
"BORROWERS"); THE PERSONS IDENTIFIED ON THE SIGNATURE PAGES HEREOF AS LENDERS
(each individually referred to herein as a "LENDER" and collectively as
"LENDERS"); DEUTSCHE BANK SECURITIES, INC. ("DEUTSCHE BANK"), as documentation
agent for Lenders (in such capacity, "DOCUMENTATION AGENT"); and BANK OF
AMERICA, N.A. ("BANK OF AMERICA"), as administrative agent for Lenders (in such
capacity, "ADMINISTRATIVE AGENT").
R E C I T A L S
WHEREAS, on April 1, 2002 (the "PETITION DATE"), Borrowers and
certain of their Domestic Subsidiaries (collectively, the "DEBTORS") filed
voluntary petitions for relief under the Bankruptcy Code with the United States
Bankruptcy Court for the Southern District of New York (such proceedings being
jointly administered under Case Nos. 02-40826 through 02-40949, 02-16322,
03-13679 through 03-13685, and 03-13687 through 03-13709 are hereinafter
referred to as the "CHAPTER 11 CASES"), and each Borrower has operated its
businesses and managed its properties as a debtor-in-possession pursuant to
Sections 1107 and 1108 of the Bankruptcy Code;
WHEREAS, the Debtors have proposed, their creditors have
approved, and the Bankruptcy Court has confirmed, the Plan of Reorganization;
WHEREAS, pursuant to the Plan of Reorganization, the Existing
Detroit L/Cs shall be replaced under this Agreement;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Borrowers, Lenders and
Agents agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ADDITIONAL SUBSIDIARY BORROWER" has the meaning assigned to
that term in subsection 6.8B.
"ADJUSTED EBITDA" means, for any period, (i) without
duplication, the aggregate amount derived by combining the amounts for such
period of (a) "Operating income
(loss)", plus (b) Net Depreciation and Amortization Expense, plus (c)
"Amortization of premium and discount, net", plus (d) "Unbilled receivables", to
the extent associated with accretion accounting for Limited Recourse Debt
relating to Projects of Company and its Subsidiaries, minus (e) "Equity in
income from unconsolidated investments", minus (ii) without duplication, the
aggregate amount derived by combining the amounts (each expressed as a positive
number) for such period of (a) "Payment of debt", to the extent consisting of
principal payments on Limited Recourse Debt relating to Projects of Company and
its Subsidiaries, plus (b) "Minority interests", plus (c) accretion of principal
on the High Yield Notes, as each such line item referred to in clauses (i)(a),
(i)(e) and (ii)(b) is reflected in Company's consolidated statement of income
prepared in conformity with GAAP and as each such line item referred to in
clauses (i)(c), (i)(d) and (ii)(a) is reflected in Company's consolidated
statement of cash flows prepared in conformity with GAAP, in each case reported
in a manner consistent with Company's reporting of such amount in its quarterly
or annual report (as the case may be) on Form 10Q or 10K, respectively, prior to
the Closing Date, whether such line items are so titled or otherwise titled;
provided, however, that with respect to any such period ending during 2008, each
of the line items referred to above shall be calculated as if the terms of the
service agreement of Company and its Subsidiaries relating to the Alexandria
Project in effect for Fiscal Year 2007 continued in effect during 2008, without
giving effect to any negative impact on Adjusted EBITDA from the terms of any
extension in 2008 of such service agreement.
"ADMINISTRATIVE AGENT" has the meaning assigned to that term
in the introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person (other than exclusively as a result of such Person's
role as a senior executive of that Person or Project manager or operator),
whether through the ownership of voting securities or by contract or otherwise.
"AGENTS" means Administrative Agent and Documentation Agent,
and "AGENT" means either one of them.
"AGGREGATE AMOUNTS DUE" has the meaning assigned to that term
in subsection 10.5.
"AGREEMENT" means this Credit Agreement dated as of March 10,
2004, as it may be amended, restated, supplemented or otherwise modified from
time to time.
"ANNUAL FREE CASH FLOW" means, for any period, (i) the sum for
such period of (without duplication) (a) all cash revenue received by Company
and its Subsidiaries from Projects and facilities that are not Projects, other
than amounts received by Company or such Subsidiary as a "pass through" entity
for debt service on Limited Recourse Debt, (b) all amounts previously in reserve
with respect to Projects that are released from such reserves to Company or
2
any of its Subsidiaries, other than amounts that are required to be paid (but
that have not yet been paid) to third parties pursuant to binding Contractual
Obligations of Company or any of its Subsidiaries and that are permitted under
this Agreement to be paid to such third parties, (c) all distributions made to
Company and its Subsidiaries on account of Capital Stock held by Company and its
Subsidiaries, (d) all interest earned by Company and its Subsidiaries on Cash On
Hand of Company and its Subsidiaries, (e) all amounts released to Company and
its Subsidiaries from cash accounts related to Expansions, excluding any portion
of such amounts that are not expended in such period and are required to be (and
are permitted under this Agreement to be) expended by Company and its
Subsidiaries in connection with such Expansions in a subsequent period (provided
that Agents shall have reviewed and approved the exclusion of such portion of
such released amounts from this clause (i)(e) prior to such exclusion), (f) all
reimbursement amounts received by Company and its Subsidiaries under the
Management Services and Reimbursement Agreement, and (g) all cash refunds or
rebates of taxes received by Company and its Subsidiaries (but excluding from
the amounts referred to in clauses (i)(a) through (i)(g) any portion of such
amounts that was previously required to be applied (and was applied) as a
Mandatory Payment), minus, without duplication of amounts already excluded or
deducted from clauses (i)(a) through (i)(g) above, (ii) the sum for such period
of (without duplication) (a) operating disbursements of Company and its
Subsidiaries, (b) Consolidated Facilities Capital Expenditures, (c) corporate
overhead of Company and its Subsidiaries, (d) payments on debt and leases of
Company and its Subsidiaries, to the extent such payments are permitted to be
made under this Agreement, (e) distributions on Capital Stock of Subsidiaries to
Persons other than Company and its Subsidiaries, (f) all payments by Company and
its Subsidiaries to third parties during such period as a result of drawings
under the Existing IPP International Project Guaranties, (g) all payments by
Company and its Subsidiaries to the extent such payments are required to be
reimbursed to Company and its Subsidiaries pursuant to the Management Services
and Reimbursement Agreement, (h) any amounts posted in such period by Company
and its Subsidiaries for credit support to the extent such amounts are required
to be posted during such period pursuant to binding Contractual Obligations of
Company or any of its Subsidiaries, (i) all cash principal, interest and fee
payments (other than Mandatory Payments) by Company and its Subsidiaries that
are not prohibited by the terms of this Agreement, including all payments made
by Borrowers to reimburse amounts drawn under Letters of Credit or letters of
credit issued under the New L/C Facility Agreement, (j) all cash payments of
taxes by Company and its Subsidiaries, (k) all cash payments by Company and its
Subsidiaries during such period under the DHC Corporate Services Reimbursement
Agreement, to the extent such payments are permitted to be made under this
Agreement, and (l) all payments by Company and its Subsidiaries made during such
period into reserves with respect to Projects, to the extent such payments (1)
are required to be placed during such period in such reserves pursuant to
binding Contractual Obligations of Company or any of its Subsidiaries and (2)
are funded from amounts which are included in the amounts described in clause
(i) of this definition for such period; provided, however, that in any Fiscal
Year commencing with Fiscal Year 2005, Annual Free Cash Flow for such Fiscal
Year shall be reduced by the amount, if any, by which the sum of the amounts of
Annual Free Cash Flow for each of the immediately preceding Fiscal Years
(commencing with Fiscal Year 2004) was less than zero.
"APPROVED FUND" means a Fund that is administered or managed
by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an
Affiliate of an entity that administers or manages a Lender.
3
"APPROVED PLAN OF REORGANIZATION" has the meaning assigned to
that term in subsection 4.1E.
"ASSET SALE" means the sale by Company or any of its
Subsidiaries to any Person of (i) any of the Capital Stock of any of Company's
Subsidiaries, (ii) substantially all of the assets of any division or line of
business of Company or any of its Subsidiaries, or (iii) any other assets
(whether tangible or intangible) of Company or any of its Subsidiaries (other
than (a) inventory sold in the ordinary course of business and (b) any such
other assets to the extent that the aggregate value of such assets sold in any
single transaction or related series of transactions is equal to $500,000 or
less and the aggregate value of all such other assets since the Closing Date is
equal to $2,000,000 or less, in each case so long as not less than 90% of the
consideration received for such assets shall be cash); provided, however, that
Asset Sales shall not include (1) any sale or discount, in each case without
recourse, of accounts receivable arising in the ordinary course of business, but
only in connection with the compromise or collection thereof (provided, that
sales and discounts of not more than $10,000,000 in face value of accounts
receivable may be excluded from Asset Sales pursuant this clause (1), and the
sole consideration received in connection with any such sale of accounts
receivable shall be cash), (2) any sale or exchange of specific items of
equipment, so long as the purpose of each such sale or exchange is to acquire
(and results within 120 days of such sale or exchange in the acquisition of)
replacement items of equipment which are the functional equivalent of the item
of equipment so sold or exchanged (provided, that any cash received in
connection with any such sale or exchange that is not expended as part of such
sale or exchange to obtain such replacement items of equipment, to the extent in
excess of the amounts set forth in clause (b) of this definition, shall be
deemed cash proceeds of an Asset Sale), (3) disposals of obsolete, worn out or
surplus property in the ordinary course of business (provided, that not less
than 75% of the consideration, if any, received in connection with any such
disposal shall be cash, and any such cash received, to the extent in excess of
the amounts set forth in clause (b) of this definition, shall be deemed cash
proceeds of an Asset Sale), (4) any discount or compromise of notes or accounts
receivable for less than the face value thereof, to the extent Company deems
necessary in order to resolve disputes that occur in the ordinary course of
business, or (5) any IPP International Sale.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit VI annexed hereto.
"ASSUMPTIONS" has the meaning assigned to that term in
subsection 5.11D.
"BANK OF AMERICA" has the meaning assigned to that term in the
introduction to this Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"BANKRUPTCY COURT" means the United States Bankruptcy Court
for the Southern District of New York and any other court properly exercising
jurisdiction over any relevant Chapter 11 Case.
4
"BANKRUPT SUBSIDIARY" means any of the Xxxxxx Subsidiaries,
the Lake Subsidiary or the Tampa Subsidiaries, in each case so long as such
Debtor remains subject to its Chapter 11 Case before the Bankruptcy Court.
"BASE RATE" means, at any time, the higher of (i) the Prime
Rate or (ii) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate. Any change in the Base Rate due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective on the effective date of
such change.
"BORROWER JOINDER AGREEMENT" means a Borrower Joinder
Agreement, substantially in the form of Exhibit VIII annexed hereto.
"BORROWERS" has the meaning assigned to that term in the
introduction to this Agreement.
"BUDGET" means (i) with respect to Fiscal Year 2004, the
budget delivered by Company to Lenders on or prior to the Closing Date pursuant
to subsection 4.1G, setting forth projected cash receipts and expenditures for
Company and its Subsidiaries for each calendar month and each Fiscal Quarter
from the Closing Date through December 31, 2004, and projected net cash flows
for Company and its Subsidiaries for each Fiscal Year thereafter through
December 31, 2009, as such budget may be supplemented pursuant to subsection
6.1(i), and (ii) with respect to each Fiscal Year after 2004, the budget
delivered by Company to Lenders pursuant to subsection 6.1(xvi), setting forth
projected cash receipts and expenditures for Company and its Subsidiaries for
each calendar month and Fiscal Quarter during such Fiscal Year and projected net
cash flows for Company and its Subsidiaries for each Fiscal Year thereafter
through December 31, 2009, as such budget may be supplemented pursuant to
subsection 6.1(i).
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New York, the
State of Texas or the State of California or is a day on which banking
institutions located in any such state are authorized or required by law or
other governmental action to close.
"CANADIAN LENDERS" means Non-US Lenders, if any, that are (i)
Lenders on the Closing Date in addition to being Canadian Loss Sharing Lenders
(as defined in the Existing Intercreditor Agreement) immediately prior to the
Closing Date or (ii) Non-US Lenders domiciled in Canada that (a) hold Letter of
Credit Exposure originally held on the Closing Date by one or more Non-US
Lenders referred to in clause (i) and (b) received such Letter of Credit
Exposure directly from another Canadian Lender. Each reference herein to
Canadian Lenders shall be a reference to such Persons solely with respect to
Letter of Credit Commitments and Letter of Credit Exposure held by Canadian
Lenders on the Closing Date.
"CAPITAL EXPENDITURES" means cash expenditures by Company and
its Subsidiaries that, in conformity with GAAP, would be included in "additions
to property, plant or equipment" or comparable items reflected in the
consolidated statement of cash flows of Company and its Subsidiaries for the
relevant period.
5
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL STOCK" means the capital stock or other equity
interests of a Person.
"CASH MANAGEMENT SYSTEM" means the cash management system of
Borrowers, described in Schedule 4.1P annexed hereto, as such Cash Management
System may be modified pursuant to subsection 6.10.
"CASH ON HAND" has the meaning assigned to that term in
subsection 2.3A(i)(f).
"CEA" means Covanta Energy Americas, Inc., a Delaware
corporation.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et
seq.), or any successor statute, and all implementing regulations promulgated
thereunder.
"CHANGE IN CONTROL" means the occurrence of any one or more of
the following: (i) DHC shall cease to own, directly, 80% or more of the
outstanding Capital Stock of Company; or (ii) any "change of control" or "change
in control" or event, however titled, shall occur that requires under the High
Yield Indenture a prepayment of the High Yield Notes or an offer to prepay High
Yield Notes as a result of a change in ownership of all or some portion of the
Capital Stock of Company or any of its Subsidiaries or all or substantially all
of the assets of Company and its Subsidiaries.
"CHAPTER 11 CASES" has the meaning assigned to that term in
the recitals to this Agreement.
"CLOSING DATE" means the date on which each of the conditions
described in subsection 4.1 have been satisfied or waived by Agents and
Requisite Lenders (or such other Lenders as may be required under subsection
10.6).
"CLOSING DATE MORTGAGED PROPERTY" has the meaning assigned to
that term in subsection 4.1N.
"CLOSING DATE MORTGAGES" has the meaning assigned to that term
in subsection 4.1N.
"CLOSING DATE RETAINED AMOUNT" has the meaning assigned to
that term in subsection 4.1T.
"COLLATERAL" means, collectively, all of the real, personal
and mixed property (including Capital Stock) in which Liens are purported to be
granted pursuant to the Collateral Documents, as security for the Obligations.
6
"COLLATERAL ACCOUNT" means the cash collateral account
maintained with Collateral Agent pursuant to the Security Agreement to secure
the obligations of Borrowers with respect to Letter of Credit Exposure.
"COLLATERAL AGENT" means Bank of America, in its capacity as
Collateral Agent under the Intercreditor Agreement and the Collateral Documents.
"COLLATERAL DOCUMENTS" means the Security Agreement, the DHC
Pledge Agreement, the Control Agreements, the Mortgages and all other
instruments or documents (pursuant to which a Lien to secure all or any portion
of the Obligations is purported or intended to be created, granted, evidenced or
perfected) delivered from time to time by any Credit Party pursuant to this
Agreement or any of the other Credit Documents, as such instruments and
documents may be amended, restated, supplemented or otherwise modified from time
to time.
"COMMODITIES AGREEMENT" means any long-term or forward
purchase contract or option contract to buy, sell or exchange commodities or
similar agreement or arrangement to which Company or any of its Subsidiaries is
a party unless, under the terms of such contract, option contract agreement or
arrangement Company expects to make or take delivery of the commodities which
are the subject thereof.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
"COMPETITOR" means any Person (and its Affiliates) primarily
engaged in the business of (i) the generation and sale of electricity or (ii)
municipal waste management.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit V annexed hereto.
"CONFIRMATION ORDER" means the Findings of Fact, Conclusions
of Law and Order under 11 U.S.C. Section 1129 and Rule 3020 of the Federal Rules
of Bankruptcy Procedure Confirming Debtors' Second Joint Plan of Reorganization
under Chapter 11 of the Bankruptcy Code entered by the Bankruptcy Court on March
5, 2004 in the Chapter 11 Cases, without modification, revision or amendment.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
(i) Consolidated Interest Expense for such period minus (ii) to the extent
included in Consolidated Interest Expense for such period, accretion of
principal on the High Yield Notes, interest paid in kind and not in cash during
such period and any other amounts not paid or payable in cash.
"CONSOLIDATED FACILITIES CAPITAL EXPENDITURES" means, for any
period, the aggregate of all cash expenditures by Company and its Subsidiaries
during that period that, in conformity with GAAP, would be included in
"additions to property, plant or equipment" or comparable items reflected in the
consolidated statement of cash flows of Company and its Subsidiaries for that or
any other period. Expenditures that are reimbursed by the client (if such client
is a Government Authority) of a Project under the principal lease, service or
operating agreement relating to such Project pursuant to a Contractual
Obligation on the part of such client to reimburse such expenditures shall not
constitute Consolidated Facilities Capital Expenditures.
7
"CONSOLIDATED INTEREST EXPENSE" means, for any period, (i)
total interest expense, net of interest income, of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries to the extent such Indebtedness is or is required to be
reflected on the consolidated balance sheet of Company and its Subsidiaries in
conformity with GAAP, but excluding any Indebtedness consisting of Limited
Recourse Debt, and (ii) to the extent not included in the calculation of the
amount described in clause (i), all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements, but excluding, however, from
clauses (i) and (ii) any amounts referred to in subsection 2.2 payable to Agents
and Lenders on or before the Closing Date and any amounts referred to in
subsection 2.3 of the New L/C Facility Agreement payable to the administrative
agent and the lenders thereunder on or before the Closing Date.
"CONSOLIDATED LEVERAGE RATIO" means, as at any date of
determination, the ratio of (a) Total Debt as at such date to (b) Adjusted
EBITDA for the four-Fiscal Quarter period most recently ended prior to such
date.
"CONSOLIDATED NET WORTH" means, as at any date of
determination, the sum of the capital stock and additional paid-in capital plus
retained earnings (or minus accumulated deficits) of Company and its
Subsidiaries on a consolidated basis, as such amounts are or are required to be
reflected on the consolidated balance sheet of Company and its Subsidiaries in
conformity with GAAP.
"CONTINGENT OBLIGATION", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Hedge Agreements. Contingent Obligations shall include
(a) the direct or indirect guaranty, endorsement (otherwise than for collection
or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (1) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (2) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (1) or (2) of this
sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the amount
(if stated) of the obligation so guaranteed or otherwise supported or, if less,
the amount to which such Contingent Obligation is specifically limited, or, if
the amount of any Contingent Obligation is not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by
Company in good faith based upon reasonable
8
assumptions. No obligations under Performance Guaranties shall constitute
Contingent Obligations.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"CONTROL AGREEMENT" means an agreement, satisfactory in form
and substance to Administrative Agent and executed by the financial institution
or securities intermediary at which a Deposit Account or a Securities Account,
as the case may be, is maintained, pursuant to which such financial institution
or securities intermediary confirms and acknowledges Collateral Agent's security
interest in such account, and agrees that the financial institution or
securities intermediary, as the case may be, will comply with instructions
originated by Collateral Agent as to disposition of funds in such account,
without further consent by Company or any Subsidiary, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time.
"CORPORATE SERVICES REIMBURSEMENT AGREEMENT" means the
corporate services and expense reimbursement agreement entered into by DHC and
Company on the Closing Date, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
thereunder and under subsection 7.12.
"COVANTA ENERGY PENSION PLAN" means the Pension Plan referred
to generally by Company on and prior to the Closing Date as the "Covanta Energy
Pension Plan".
"CPIH" means Covanta Power International Holdings, Inc., a
Delaware corporation, and its successors and assigns.
"CPIH BORROWERS" means CPIH and any additional borrowers under
the CPIH Term Loan Agreement from time to time.
"CPIH REVOLVER AGREEMENT" means that certain credit agreement
dated as of the date hereof by and among CPIH Borrowers, as borrowers, and the
financial institutions listed on the signature pages thereof, as lenders, as
such credit agreement may be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under subsection 7.12.
"CPIH REVOLVER DOCUMENTS" means the "Loan Documents" as
defined in the CPIH Revolver Agreement.
"CPIH STOCK PLEDGE AGREEMENT" means the pledge agreement dated
as of the Closing Date pursuant to which CEA pledges the Capital Stock of CPIH
to secure the obligations of CPIH Borrowers under the CPIH Revolver Documents
and the CPIH Term Loan Documents, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
under subsection 7.12.
9
"CPIH SUBSIDIARIES" means, on and after the Closing Date, CPIH
and its Subsidiaries.
"CPIH TERM LOAN AGREEMENT" means that certain credit agreement
dated as of the date hereof by and among CPIH Borrowers, the other Persons
listed on the signature pages thereof, as lenders, and Bank of America and
Deutsche Bank, as agents for such lenders, as such credit agreement may be
amended, restated, supplemented or otherwise modified from time to time to the
extent permitted under subsection 7.12.
"CPIH TERM LOAN DOCUMENTS" means the "Loan Documents" as
defined in the CPIH Term Loan Agreement.
"CREDIT DOCUMENTS" means this Agreement, the Letters of Credit
(and any applications for, or reimbursement agreements or other documents or
certificates executed by Borrowers in favor of an Issuing Lender relating to,
the Letters of Credit) and the Collateral Documents, the Intercreditor Agreement
and all amendments, waivers and consents relating thereto.
"CREDIT PARTY" means each Borrower and DHC, and "CREDIT
PARTIES" means all such Persons, collectively.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, or option contract to buy, sell or exchange currencies
or other similar agreement or arrangement to which Company or any of its
Subsidiaries is a party.
"D.E. SHAW" means D.E. Shaw Laminar Portfolios, L.L.C. a
Delaware limited liability company.
"DEBTORS" has the meaning assigned to that term in the
recitals to this Agreement.
"DEFAULTED PARTICIPATION" has the meaning assigned to that
term in subsection 2.6.
"DEFAULT EXCESS" has the meaning assigned to that term in
subsection 2.6.
"DEFAULTING LENDER" has the meaning assigned to that term in
subsection 2.6.
"DEFAULT PERIOD" has the meaning assigned to that term in
subsection 2.6.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
similar account maintained with a Person engaged in the business of banking,
including a savings bank, savings and loan association, credit union or trust
company.
"DETROIT PROJECT SUBSIDIARY" means Michigan Waste Energy,
Inc., a Delaware corporation.
10
"DEUTSCHE BANK" has the meaning assigned to that term in the
introduction to this Agreement.
"DEVELOPMENT EXPENSE" means, with respect to any Project, cash
expenditures made by Company or any of its Subsidiaries to fund (i) engineering,
permitting, legal, environmental and other similar expenses and (ii) fees and
expenses of consultants and advisers with respect to engineering, permitting,
legal and environmental issues, in each case to the extent such expenses are
payable to Persons other than Company and its Subsidiaries in connection with
any Expansion permitted under this Agreement, prior to the date of financial
closing for such Expansion; provided, that Development Expenses shall exclude
payroll expense and reasonable travel expenses of employees of Company and its
Subsidiaries.
"DHC" means Xxxxxxxxx Holding Corporation, a Delaware
corporation.
"DHC PLEDGE AGREEMENT" means the DHC Pledge Agreement executed
and delivered on the Closing Date by DHC, substantially in the form of Exhibit
XI annexed hereto, as such DHC Pledge Agreement may thereafter be amended,
restated, supplemented or otherwise modified from time to time.
"DHC TAX SHARING AGREEMENT" means the tax sharing agreement
entered into by DHC, Company and CPIH on the Closing Date, as such agreement may
be amended, restated, supplemented or otherwise modified from time to time to
the extent permitted thereunder and under subsection 7.12.
"DIP AGENTS" means the Persons identified as "Agents" under
the DIP Credit Agreement, in their capacities as agents for DIP Lenders under
the DIP Credit Agreement.
"DIP CREDIT AGREEMENT" means that certain Debtor-In-Possession
Credit Agreement dated as April 1, 2002, by and among Company and certain of its
Subsidiaries, as debtors and debtors-in-possession, the financial institutions
listed on the signature pages thereof, as lenders, and Bank of America and
Deutsche Bank, as agents for such lenders, as such agreement is in effect
immediately prior to the Closing Date.
"DIP CREDIT DOCUMENTS" means the "Loan Documents" as defined
in the DIP Credit Agreement.
"DIP LENDER" means each of the "Lenders" under the DIP Credit
Agreement on the Closing Date, in its capacity as a lender under the DIP Credit
Agreement.
"DIP TRANCHE A L/C" means each letter of credit outstanding as
of the Closing Date that is described on Schedule 1.1A (Part I) annexed hereto
(setting forth the expiration date, renewal requirements and other particulars
of such letter of credit, including the type of obligation supported thereby),
under which the maximum aggregate available amount for drawing is $6,276,500.00,
determined as of the Closing Date; and "DIP TRANCHE A L/CS" means all such
letters of credit, collectively.
"DIP TRANCHE X X/C" means each letter of credit outstanding as
of the Closing Date that is described on Schedule 1.1A (Part II) annexed hereto
(setting forth the expiration
11
date, renewal requirements and other particulars of such letter of credit),
under which the maximum aggregate available amount for drawing is
$170,074,145.19, determined as of the Closing Date; and "DIP TRANCHE X X/CS"
means all such letters of credit, collectively.
"DISTRIBUTABLE CASH" has the meaning assigned to that term in
subsection 4.1T.
"DOCUMENTATION AGENT" has the meaning assigned to that term in
the introduction to this Agreement and also means and includes any successor
Documentation Agent appointed pursuant to subsection 9.5.
"DOLLARS" and the sign "$" mean the lawful money of the United
States.
"DOMESTIC CASH EQUIVALENTS" means, as at any date of
determination, (i) marketable securities (a) issued or directly and
unconditionally guaranteed as to interest and principal by the United States
Government or (b) issued by any agency of the United States the obligations of
which are backed by the full faith and credit of the United States, in each case
maturing within 30 days after such date; (ii) marketable direct obligations
issued by any state of the United States or any political subdivision of any
such state or any public instrumentality thereof, in each case maturing within
30 days after such date and having, at the time of the acquisition thereof, the
highest rating obtainable from either Standard & Poor's ("S&P") or Xxxxx'x
Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no more
than 30 days from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least "A-1" from S&P or at least "P-1" from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within 30
days after such date and issued or accepted by any Lender or by any commercial
bank organized under the laws of the United States or any state thereof or the
District of Columbia that (a) is at least "adequately capitalized" (as defined
in the regulations of its primary Federal banking regulator) and (b) has Tier 1
capital (as defined in such regulations) of not less than $100,000,000; (v)
shares of any money market mutual fund that (a) has at least 95% of its assets
invested continuously in the types of investments referred to in clauses (i) and
(ii) above, (b) has net assets of not less than $500,000,000, and (c) has the
highest rating obtainable from either S&P or Moody's; and (vi) such other
securities as Company and Agents may agree on from time to time.
"DOMESTIC SUBSIDIARY" means any Subsidiary of any Borrower
that is incorporated or organized under the laws of the United States, any state
thereof or in the District of Columbia.
"ELIGIBLE ASSIGNEE" means (i) any Person that is (a) a
commercial bank organized under the laws of the United States or any state
thereof, (b) a savings and loan association or savings bank organized under the
laws of the United States or any state thereof, (c) a commercial bank organized
under the laws of any other country or a political subdivision thereof, provided
that (1) such bank is acting through a branch or agency located in the United
States or (2) such bank is organized under the laws of a country that is a
member of the Organization for Economic Cooperation and Development or a
political subdivision of such country, or (d) any other financial institution
that extends credit or buys loans as one of its businesses; (ii) any Person that
is a Lender at the time of the relevant assignment; or (iii) any other Person
designated as an Eligible Assignee pursuant to the prior written consent of
Agents in their sole discretion;
12
provided that none of Company nor any Affiliate of Company nor any Competitor
shall be an Eligible Assignee; and provided further that, in order to be an
Eligible Assignee, a Person must have at the time of determination a long term
senior unsecured debt rating of "A2" or better from Moody's and/or "A" or better
from S&P.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is maintained or contributed to by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.
"ENFORCING LENDERS" has the meaning assigned to that term in
subsection 10.5B.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Government Authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, or (ii) in connection with any
actual or alleged damage, injury, threat or harm to health, safety, natural
resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of any Government
Authority relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage, transportation
or disposal of Hazardous Materials, or (iii) occupational safety and health,
industrial hygiene, land use or the protection of human, plant or animal health
or welfare, in any manner applicable to Company or any of its Subsidiaries
(including, solely with respect to periods prior to the Closing Date, CPIH
Subsidiaries) or any Facility.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation that is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) that is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation) that would reasonably be
expected to have a Material Adverse Effect; (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the imposition of a Lien on the property of Company or
any of its Subsidiaries pursuant to Section 412(n) of the Internal Revenue Code,
except any such failure or imposition
13
attributable to an error made in good faith which results in the imposition of
liability or a Lien on Company and its Subsidiaries and their respective ERISA
Affiliates of an immaterial amount, so long as such error, failure and
imposition are promptly corrected after discovery of such error by Company or
any of its Subsidiaries, or the failure to make by its due date a required
installment of a material amount under Section 412(m) of the Internal Revenue
Code with respect to any Pension Plan or the failure to make any required
contribution of a material amount to a Multiemployer Plan; (iii) the provision
by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA
of a notice of intent to terminate such plan in a distress termination described
in Section 4041(c) of ERISA; (iv) the withdrawal by Company, any of its
Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan
with two or more contributing sponsors or the termination of any such Pension
Plan resulting in material current liability of Company or any of its
Subsidiaries (including CPIH Subsidiaries, to the extent such CPIH Subsidiaries
are ERISA Affiliates of Company or any of its Subsidiaries) pursuant to Section
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition that
would reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of material current liability on Company, any
of its Subsidiaries or any of their respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA; (vii) the withdrawal of Company, any of its Subsidiaries or
any of their respective ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer
Plan if it would reasonably be expected that Company or any of its Subsidiaries
will incur material liability therefor (in excess of the contribution that would
otherwise have been due absent such withdrawal), or the receipt by Company, any
of its Subsidiaries or any of their respective ERISA Affiliates of notice from
any Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA; (viii) the assertion of a material claim
(other than routine claims for benefits) against any Employee Benefit Plan other
than a Multiemployer Plan or the assets thereof, or against Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in connection with any
Employee Benefit Plan, if such assertion or the liability with respect thereto
would reasonably be expected to have a Material Adverse Effect; (ix) receipt
from the Internal Revenue Service of notice of the failure of any Pension Plan
(or any other Employee Benefit Plan intended to be qualified under Section
401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the
Internal Revenue Code, or of the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code, in either case if such failure would reasonably be
expected to have a Material Adverse Effect; or (x) the imposition of a Lien on
the property of Company or any of its Subsidiaries pursuant to Section
401(a)(29) of the Internal Revenue Code or pursuant to ERISA with respect to any
Pension Plan.
"EVENT OF DEFAULT" has the meaning assigned to that term in
Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
14
"EXCLUDED SUBSIDIARY" means (i) each Subsidiary of Company for
which becoming a Borrower would constitute a material violation of (a) a valid
and enforceable Contractual Obligation in favor of a Person other than Company
or any of its Subsidiaries for which the required consents have not been
obtained or (b) applicable law affecting such Subsidiary, provided that any such
Subsidiary of Company shall cease to be covered under this clause at such time
as such Subsidiary's becoming a Borrower would no longer constitute a material
violation of such Contractual Obligation or applicable law, whether as a result
of obtaining the required consents or otherwise, and (ii) each Bankrupt
Subsidiary.
"EXISTING DETROIT L/CS" means, collectively, the following DIP
Tranche X X/Cs: (i) Irrevocable Standby Letter of Credit Number SBY501806 issued
by UBS Bank, in the available amount of $96,731,392.81 as of the Closing Date,
for the benefit of PMCC Leasing Corporation and Resource Recovery Business Trust
- A, and (ii) Irrevocable Standby Letter of Credit Number SBY501835 issued by
UBS Bank, in the available amount of $41,460,161.38 as of the Closing Date, for
the benefit of Aircraft Services Corporation and Resource Recovery Business
Trust - B.
"EXISTING INTERCREDITOR AGREEMENT" means the "Intercreditor
Agreement" as defined in the DIP Credit Agreement on the Closing Date, as such
"Intercreditor Agreement" is in effect on the Closing Date.
"EXISTING IPP INTERNATIONAL PROJECT GUARANTIES" means,
collectively, (i) the existing guaranty by Covanta Energy Group of the
obligations of the CPIH Subsidiaries under certain agreements relating to the
Haripur Project, the Samalpatti Project and the Trezzo Project, (ii) the
existing guaranty by Covanta Projects, Inc. of the obligations of the CPIH
Subsidiaries under certain agreements relating to the Quezon Project, and (iii)
the existing guaranty by Company of the obligations of the CPIH Subsidiaries
under certain agreements relating to the Balaji/Madurai Project and the LICA
Project, as each such guaranty may be amended, restated, supplemented or
otherwise modified to the extent permitted hereunder.
"EXPANSION" means, with respect to any waste-to-energy Project
in existence as of the date hereof, additions or improvements to the existing
facilities of such Project that involve the addition of a boiler or a turbine
generator.
"FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by any Borrower or any of its
Subsidiaries, by any of their respective predecessors or by any Person who was
an Affiliate of Borrower or any of its Subsidiaries prior to the Closing Date.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by Administrative Agent from three Federal funds
brokers of recognized standing selected by Administrative Agent.
15
"FIFRA" means the Federal Insecticide, Fungicide, and
Rodenticide Act, as amended (7 U.S.C. Section 136 et seq.), or any successor
statute, and all implementing regulations promulgated thereunder.
"FIRST PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that (i) such
Lien is perfected and has priority over any other Lien on such Collateral (other
than Liens permitted pursuant to subsections 7.2A(iii) through (xi)) and (ii)
such Lien is the only Lien (other than Liens permitted pursuant to subsection
7.2) to which such Collateral is subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its
Subsidiaries ending on December 31st of each calendar year.
"FLOOD HAZARD PROPERTY" means any real property that is
subject to a Mortgage and is located in an area designated by the Federal
Emergency Management Agency as having special flood or mud slide hazards.
"FOREIGN SUBSIDIARY" means any Subsidiary of any Borrower that
is not a Domestic Subsidiary.
"FUND" means any Person (other than a natural Person) that is
(or will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.
"FUNDING AND PAYMENT OFFICE" means (i) the office of
Administrative Agent located at 000 Xxxx Xx., 00xx Xxxxx, Xx: TX1-492-14-11,
Xxxxxx, Xxxxx 00000 or (ii) such other office of Administrative Agent as may
from time to time hereafter be designated as such in a written notice delivered
by Administrative Agent to Company and each Lender.
"FUNDING BORROWER" has the meaning assigned to that term in
subsection 2.7C.
"FUNDING DEFAULT" has the meaning assigned to that term in
subsection 2.6.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, accounting principles generally accepted in
the United States set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as are approved by the American
Institute of Certified Public Accountants.
"GEOTHERMAL SALE" means (i) the sale or other disposition by
Company and its Subsidiaries of all or substantially all of their respective (1)
Capital Stock in Heber Geothermal Company, Heber Field Company and Second
Imperial Geothermal Company, L.P., and (2) Capital Stock in non-debtor Affiliate
Mammoth-Pacific L.P., which entities own or lease geothermal plants and
facilities in California (the "GEOTHERMAL BUSINESS"), and (ii) the assumption
and/or assignment by Company and its Subsidiaries of certain contracts related
to the
16
Geothermal Business, in the case of both clauses (i) and (ii) occurring prior to
or concurrently with the consummation of the Plan of Reorganization.
"GOVERNING BODY" means the board of directors or other body
having the power to direct or cause the direction of the management and policies
of a Person that is a corporation, partnership, trust or limited liability
company.
"GOVERNMENT AUTHORITY" means any political subdivision or
department thereof, any other governmental or regulatory body, commission,
central bank, board, bureau, organ or instrumentality or any court, in each case
whether federal, state, local or foreign.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
registration, authorization, plan, directive, consent, order or consent decree
of or from, or notice to, any Government Authority.
"GREENWAY L/C" means, collectively, the letter of credit
outstanding on the Closing Date in the stated amount of $820,000 issued under
the DIP Credit Agreement as a "Tranche B Letter of Credit" (as defined in the
DIP Credit Agreement), and shall not mean or include any amendment, reissuance,
renewal or extension of such letter of credit after the Closing Date.
"GROSS RECEIPTS" means, in respect of any Asset Sale, the
total cash payments (including any cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) received from such Asset Sale minus any repayment of debt
related to the assets sold in such Asset Sale which is made in connection
therewith and is not prohibited under this Agreement.
"HAVERHILL DEFERRED INCOME" means, for any period, all
non-cash income resulting from payments made in 1998 by the counterparty to the
power purchase agreement relating to the Haverhill Project in order to "buydown"
its obligations under such agreement, to the extent such non-cash income is
included in consolidated revenue or consolidated earnings of Company and its
Subsidiaries during such period.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of (a) "hazardous
wastes" or "mixed wastes" as defined in RCRA or in any other Environmental Law;
(b) "hazardous substances", "pollutants" or "contaminants" as defined in CERCLA
or in any other Environmental Law; (c) "chemical substances" or "mixtures" as
defined in TSCA or any other substance which is tested pursuant to TSCA or any
other Environmental Law, or the manufacture, processing, distribution, use or
disposal of which is regulated or prohibited pursuant to TSCA or any other
Environmental Law, including without limitation polychlorinated biphenyls and
electrical equipment which contains any oil or dielectric fluid containing
regulated concentrations of polychlorinated biphenyls; (d) "insecticides",
"fungicides", "pesticides" or "rodenticides" as defined in FIFRA or any other
Environmental Law; or (e) "infectious waste" or "biohazardous waste" as defined
in any Environmental Law; (ii) asbestos or any asbestos-containing materials;
(iii) urea formaldehyde foam insulation; (iv) any oil, petroleum, petroleum
fraction or petroleum derived substance; (v) any drilling fluids, produced
waters and other wastes associated with the exploration,
17
development or production of crude oil, natural gas or geothermal resources;
(vi) any flammable substances or explosives; (vii) any radioactive materials;
and (viii) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any Government Authority or which may or
could pose a hazard to the health and safety of the owners, occupants or any
Persons in the vicinity of any Facility or to the indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current,
proposed or threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment,
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with respect
to any of the foregoing.
"HEDGE AGREEMENT" means (i) an Interest Rate Agreement or a
Currency Agreement designed to hedge against fluctuations in interest rates or
currency values, respectively, or (ii) a forward agreement or arrangement
designed to hedge against fluctuation in electricity rates pertaining to
electricity produced by a Project, so long as the contractual arrangements
relating to such Project contemplate that Company or its Subsidiaries shall
deliver such electricity to third parties.
"HIGH YIELD INDENTURE" means (i) the indenture pursuant to
which the High Yield Notes are issued and (ii) any replacement indenture entered
into in connection with a refinancing, renewal, replacement or extension of the
High Yield Notes permitted under subsection 7.1(xiii), in each case as such
indenture or replacement indenture may be amended, restated, supplemented or
otherwise modified from time to time to the extent permitted under subsection
7.12.
"HIGH YIELD NOTES" means (i) the $230,000,000 in aggregate
principal amount at maturity of 8.25% Senior Notes due 2010 of Company issued
pursuant to the High Yield Indenture, and (ii) any Indebtedness incurred to
refinance, renew, replace or extend the High Yield Notes permitted to be
incurred under subsection 7.1(xiii); provided, that the initial principal amount
(and issue price) of such High Yield Notes on the Closing Date shall be
$205,000,000.
"IMMATERIAL FOREIGN SUBSIDIARY" means any of the following
Foreign Subsidiaries, in each case so long as such Subsidiary (i) has engaged in
substantially no business or operations in the most recent fiscal year of
Company and its Subsidiaries, (ii) in the most recent fiscal year of Company and
its Subsidiaries, accounted for less than $100,000 of revenues, and (iii) holds
at the time of determination less than $100,000 of assets: Covanta Energy
Europe, Ltd. (United Kingdom), OPI Xxxxxxx Ltd. (Cayman Islands), OPI Xxxxxxx
One Ltd. (Cayman Islands), and Covanta Waste to Energy Asia Investments
(Mauritius).
"INDEBTEDNESS", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
18
property or services received by such Person (excluding any such obligations
incurred under ERISA), which purchase price is (a) due more than six months from
the date of incurrence of the obligation in respect thereof or (b) evidenced by
a promissory note or similar written instrument, but excluding in either case
current trade payables incurred in the ordinary course of business and payable
in accordance with customary practices, (v) Synthetic Lease Obligations, and
(vi) all indebtedness secured by any Lien on any property or asset owned by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person. Any
obligations under Interest Rate Agreements and Currency Agreements (and Hedge
Agreements that protect against fluctuation in electricity rates) constitute (1)
in the case of Hedge Agreements, Contingent Obligations, and (2) in all other
cases, Investments, and in neither case constitute Indebtedness. For purposes of
this Agreement, the Indebtedness of any Person shall include the Indebtedness of
any partnership or joint venture in which such Person is a general partner or a
joint venturer, unless the Indebtedness of such partnership or joint venture is
expressly Limited Recourse Debt of such partnership or joint venture.
"INDEMNIFIED LIABILITIES" has the meaning assigned to that
term in subsection 10.3.
"INDEMNITEE" has the meaning assigned to that term in
subsection 10.3.
"INSURANCE PREMIUM FINANCERS" means Persons who are
non-Affiliates of Company that advance insurance premiums for Company and its
Subsidiaries pursuant to Insurance Premium Financing Arrangements.
"INSURANCE PREMIUM FINANCING ARRANGEMENTS" means,
collectively, such agreements as Company and its Subsidiaries shall enter into
after the Closing Date with Insurance Premium Financers pursuant to which such
Insurance Premium Financers shall advance insurance premiums for Company and its
Subsidiaries. Such Insurance Premium Financing Arrangements (i) shall provide
for the benefit of such Insurance Premium Financers a security interest in no
property of Company or any of its Subsidiaries other than gross unearned
premiums for the insurance policies, (ii) shall not purport to prohibit any
portion of the Liens created in favor of Collateral Agent (for the benefit of
Secured Parties) pursuant to the Collateral Documents, and (iii) shall not
contain any provision or contemplate any transaction prohibited by this
Agreement and shall otherwise be in form and substance reasonably satisfactory
to Agents.
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, software, know-how and processes used in or
necessary for the conduct of the business of Borrowers and their Subsidiaries as
currently conducted that are material to the condition (financial or otherwise),
business or operations of Borrowers and their Subsidiaries, taken as a whole.
"INTERCOMPANY MASTER NOTE" means a promissory note evidencing
Indebtedness of Company and each of its Subsidiaries which (a) to the extent the
Indebtedness evidenced thereby is owed to any Borrower, is pledged pursuant to
the Collateral Documents, and (b) to the extent the Indebtedness evidenced
thereby is owed by a Subsidiary of Company, is senior Indebtedness of such
Subsidiary (except to the extent that requiring such Indebtedness to be
19
senior would breach a contractual obligation binding on such Subsidiary), except
that any such Indebtedness owed by any Borrower to any Subsidiary which is not a
Borrower shall be subordinated in right of payment to the payment in full of the
Obligations pursuant to the terms of such note.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor
Agreement executed and delivered on the Closing Date by Borrowers, Lenders,
Agents, Collateral Agent, the agent and the lenders under the New L/C Facility
Documents, the Investor Parties, DHC and the trustee under the High Yield
Indenture, in the form of Exhibit XIII annexed hereto, as it may thereafter be
amended, restated, supplemented or otherwise modified from time to time.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which any Borrower or any of Subsidiary of
any Borrower is a party.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Company), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Company from any Person other than
Company or any of its Subsidiaries, of any equity Securities of such Subsidiary,
(iii) any direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
Company or any of its Subsidiaries to any other Person, including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales or services to that other Person in the
ordinary course of business, (iv) Interest Rate Agreements or Currency
Agreements not constituting Hedge Agreements, (v) Commodities Agreements not
constituting Hedge Agreements, or (vi) any Expansion of any Project by Company
or any of its Subsidiaries to the extent that the costs of such Expansion are
borne, directly or indirectly, by Company or any of its Subsidiaries. The amount
of any Investment shall be the original cost of such Investment plus the cost of
all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
No account receivable owed by a Person to Company or any of its Subsidiaries
that on the relevant date of determination constitutes a current asset and arose
from sales or services to such Person in the ordinary course of business shall
constitute an Investment on such date.
"INVESTOR PARTIES" means D.E. Shaw, SZ Investments, L.L.C., a
Delaware limited liability company, and Third Avenue Trust, on behalf of the
Third Avenue Value Fund Series.
"IP COLLATERAL" means, collectively, the Intellectual Property
that constitutes Collateral.
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"IPP INTERNATIONAL BUSINESS" means the assets and operations
of the business of Company and its Subsidiaries referred to by Company as the
"IPP International business" prior to the Closing Date, including the Haripur
Project, the Samalpatti Project, the Trezzo Project, the Quezon Project, the
Balaji/Madurai Project, the Linasa Project, the Don Xxxxx Project, the Rio
Volcan Project, the Bataan Project, the Magellan Project, the Xxxxx Project, the
Huantai Project, the Yanjiang Project and the Island Power Project.
"IPP INTERNATIONAL SALES" means one or more sales or
dispositions of (i) the assets and/or operations of CPIH and its Subsidiaries
and/or (ii) the Capital Stock of CPIH or any of its Subsidiaries.
"ISSUING LENDER" means (i) in the event UBS Bank executes a
counterpart hereof on the Closing Date as Issuing Lender, UBS Bank, in its
capacity as Issuing Lender, and (ii) otherwise, Bank of America, in its capacity
as Issuing Lender, or any successor Administrative Agent to Bank of America
appointed pursuant to subsection 9.5.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form.
"LAKE SUBSIDIARY" means Covanta Lake II, Inc., a Florida
corporation.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any
Leasehold Property, a letter, certificate or other instrument in writing from
the lessor under the related lease, satisfactory in form and substance to
Administrative Agent, pursuant to which such lessor agrees, for the benefit of
Administrative Agent, (i) that without any further consent of such lessor or any
further action on the part of the Borrower holding such Leasehold Property, such
Leasehold Property may be encumbered pursuant to a Mortgage and may be assigned
to the purchaser at a foreclosure sale or in a transfer in lieu of such a sale
(and to a subsequent third party assignee if Administrative Agent, any Lender,
or an Affiliate of either so acquires such Leasehold Property), (ii) that such
lessor shall not terminate such lease as a result of a default by such Borrower
thereunder without first giving Administrative Agent notice of such default and
at least 60 days (or, if such default cannot reasonably be cured by
Administrative Agent within such period, such longer period as may reasonably be
required) to cure such default, and (iii) to such other matters relating to such
Leasehold Property and the Collateral located thereon as Administrative Agent
may reasonably request.
"LEASEHOLD PROPERTY" means any leasehold interest of any
Borrower as lessee under any lease of real property.
"LENDER" and "LENDERS" means the Persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and permitted assigns pursuant to subsection 10.1.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means (i) letters of
credit issued under this Agreement by the Issuing Lender pursuant to subsection
3.1A and (ii)(a) letters of credit issued by the Issuing Lender to replace
Letters of Credit pursuant to subsection 3.1B(i) and (b) amendments to Letters
of Credit issued by the Issuing Lender to extend the expiration date of such
Letters of Credit.
21
"LETTER OF CREDIT COMMITMENT" means the commitment of a Lender
under subsection 2.1A to purchase and fund participations in Letters of Credit
pursuant to Section 3, and "LETTER OF CREDIT COMMITMENTS" means such commitments
of all Lenders in the aggregate.
"LETTER OF CREDIT EXPOSURE" means, with respect to any Lender
as of any date of determination, the sum of (a) in the event that Lender is an
Issuing Lender, the aggregate Letter of Credit Usage in respect of all Letters
of Credit issued by that Lender (in each case net of any participations
purchased by other Lenders in such Letters of Credit or in any drawings
thereunder not theretofore reimbursed by Borrowers) plus (b) the aggregate
amount of all participations purchased by that Lender in any other outstanding
Letters of Credit or any drawings under any such other Letters of Credit not
theretofore reimbursed by Borrowers.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding plus (ii) the aggregate amount of all drawings under all
Letters of Credit honored by Issuing Lenders and not theretofore reimbursed by
Borrowers.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LIMITED RECOURSE DEBT" means, with respect to any Subsidiary
of Company, Indebtedness of such Subsidiary with respect to which the recourse
of the holder or obligee of such Indebtedness is limited to (i) assets
associated with the Project (which in any event shall not include assets held by
any Borrower other than a Borrower, if any, whose sole business is the ownership
and/or operation of such Project and substantially all of whose assets are
associated with such Project) in respect of which such Indebtedness was incurred
and/or (ii) such Subsidiary or the equity interests in such Subsidiary, but in
the case of clause (ii) only if such Subsidiary's sole business is the ownership
and/or operation of such Project and substantially all of such Subsidiary's
assets are associated with such Project. For purposes of this Agreement,
Indebtedness of a Subsidiary of Company shall not fail to be Limited Recourse
Debt solely by virtue of the fact that the holders of such Limited Recourse Debt
have recourse to Company or another Subsidiary of Company pursuant to a
Contingent Obligation supporting such Limited Recourse Debt or a Performance
Guaranty, so long as such Contingent Obligation or Performance Guaranty is
permitted under subsection 7.4 of this Agreement.
"MANAGEMENT SERVICES AND REIMBURSEMENT AGREEMENT" means the
management services and reimbursement agreement entered into by CPIH, Company
and certain of their respective Subsidiaries on the Closing Date, in form and
substance satisfactory to the Agents as such agreement may be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
thereunder and under subsection 7.12.
22
"MANDATORY PAYMENT" means any amount described in subsections
2.3A(i)(a)-(f) to be applied to repay funded amounts under Letters of Credit or
to cash collateralize Letter of Credit Exposure, as determined pursuant to
subsection 2.3A.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Borrowers, taken as a whole, or Company and its
Subsidiaries, taken as a whole, or (ii) the impairment of the ability of Credit
Parties taken as a whole to perform, or of Administrative Agent or Lenders to
enforce, the Obligations.
"MATERIAL CONTRACT" means (i) the principal lease agreement,
if any, and the principal service or operating agreement, if any, with respect
to each waste-to-energy Project and the principal lease agreement, if any, with
respect to each independent power plant Project to which Company or any of its
Subsidiaries is a party, each of which is in existence as of the Closing Date
and is described on Schedule 1.1B annexed hereto, and (ii) any other contract or
other arrangement to which Company or any of its Subsidiaries is a party (other
than the Credit Documents) for which breach, nonperformance, cancellation or
failure to renew would reasonably be expected to have a Material Adverse Effect.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property
reasonably determined by Administrative Agent to be of material value as
Collateral or of material importance to the operations of Company or any of its
Subsidiaries.
"MATERIAL SUBSIDIARY" means, with respect to any Person, any
Subsidiary of such Person now existing or hereafter acquired or formed by such
Person which, on a consolidated basis for such Subsidiary and all of its
Subsidiaries, (i) for the most recent fiscal year of such Person accounted for
more than 1% of the consolidated revenues of such Person and its Subsidiaries,
(ii) as at the end of such fiscal year, was the owner of more than 1% of the
consolidated assets of such Person and its Subsidiaries, or (iii) is capitalized
with more than $500,000 of equity.
"MATURITY DATE" means March 10, 2009.
"MORTGAGE" means (i) a security instrument (whether designated
as a deed of trust or a mortgage or by any similar title) executed and delivered
by any Borrower, substantially in the form of Exhibit XIV annexed hereto or in
such other form as may be approved by Administrative Agent in its sole
discretion, in each case with such changes thereto as may be recommended by
Administrative Agent's local counsel based on local laws or customary local
mortgage or deed of trust practices, or (ii) at Administrative Agent's option,
in the case of any real property or Material Leasehold Property that is the
subject of subsection 6.9, an amendment to an existing Mortgage, in form
satisfactory to Administrative Agent, in either case as such security instrument
or amendment may be amended, restated, supplemented or otherwise modified from
time to time. "MORTGAGES" means all such instruments collectively, whether
executed as of or subsequent to the Closing Date.
23
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan that is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, Gross Receipts received from such Asset Sale, net of any bona fide direct
costs incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable prior to the earlier of (a) the date
which is eighteen months from the date of such Asset Sale and (b) the Maturity
Date as a result of any gain recognized in connection with such Asset Sale, (ii)
additional Taxes actually payable upon the closing of such Asset Sale (including
any transfer Taxes or Taxes on gross receipts), (iii) actual, reasonable and
documented out-of-pocket fees and expenses (including reasonable legal fees,
reasonable fees to advisors and severance costs that are due (pursuant to a
Contractual Obligation, or written employment policy applicable to terminated
employees generally, of Company or any of its Subsidiaries in effect prior to
such Asset Sale or pursuant to applicable law) and payable immediately upon
consummation of such Asset Sale to employees of Company and its Subsidiaries
that are terminated as a result thereof) paid to Persons other than Company and
its Subsidiaries and their respective Affiliates in connection with such Asset
Sale (including fees necessary to obtain any required consents of such Persons
to such Asset Sale), and (iv) payment of the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness that is (x) secured
by a valid, enforceable and perfected Lien on the stock or assets in question
that is permitted under subsection 7.2 and (y) required to be repaid under the
terms of such Indebtedness as a result of such Asset Sale (without duplication
of amounts deducted in calculating the Gross Receipts from such Asset Sale) and
is permitted to be paid under the Credit Documents.
"NET DEPRECIATION AND AMORTIZATION EXPENSE" means, for any
period, (i) the sum of the amounts (each expressed as a positive number) for
such period of "Depreciation" and "Amortization", as each such line item is
reflected in Company's consolidated statement of cash flows prepared in
conformity with GAAP and reported in a manner consistent with Company's
reporting of such amount in its quarterly or annual report (as the case may be)
on Form 10Q or 10K, respectively, prior to the Closing Date, whether such line
items are so titled or otherwise titled, minus (iii) Haverhill Deferred Income.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any cash payments
or proceeds received by Company or any of its Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of (a)
income taxes reasonably estimated to be actually payable prior to the earlier of
(1) the date which is eighteen months from the date of such receipt and (2) the
Maturity Date as a result of the receipt of such payments or proceeds and (b)
any actual, reasonable and documented out-of-pocket fees and expenses (including
reasonable legal fees, reasonable fees to advisors and severance costs that are
due (pursuant to a Contractual Obligation, or written employment policy
applicable to terminated employees generally, of Company or any of its
Subsidiaries in effect prior to the event causing or relating to the payment
referred to in clause (i) or (ii) above or pursuant to applicable law) and
payable on or prior to the receipt of such payment or proceeds to employees of
Company and its Subsidiaries that have been terminated as a result of the
relevant loss, taking or sale) paid to
24
Persons other than Company and its Subsidiaries and their respective Affiliates
in connection with the relevant loss, taking or sale or the adjustment or
settlement of any claims of Company or such Subsidiary in respect thereof;
provided, however, that Net Insurance/Condemnation Proceeds shall be reduced in
an amount equal to the amount of proceeds Subsidiaries of Company are legally
bound or required, pursuant to agreements in effect on the Closing Date, or
which were entered into after the Closing Date with respect to the financing or
acquisition of a Project, to use for purposes other than a Mandatory Payment.
"NET INDEBTEDNESS PROCEEDS" means the cash proceeds (net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith (including reasonable legal fees and expenses)) from the
incurrence of Indebtedness by Company or any of its Subsidiaries.
"NEW L/C FACILITY AGREEMENT" means (i) that certain credit
agreement dated as of the date hereof by and among Borrowers, as borrowers, and
the financial institutions listed on the signature pages thereof, as lenders,
and (ii) any credit agreement entered into by Borrowers to refinance, replace,
renew or extend, in whole or in part, the credit agreement referenced in clause
(i) and the Indebtedness and letters of credit issued thereunder (provided, that
(a) the terms of such credit agreement, such Indebtedness and such letters of
credit as so refinanced, replaced, renewed or extended shall not be more
disadvantageous to Company and its Subsidiaries and the Lenders (in a manner
deemed material by Agents) than the New L/C Facility Agreement in effect on the
Closing Date (it being understood and agreed that any refinancing, replacement,
renewal or extension having the effect of (1) increasing the maximum amount of
any commitment to extend loans (as opposed to letters of credit) under the New
L/C Facility Documents, or (2) reducing, delaying or waiving any otherwise
required reduction in the amount of any commitment to extend loans or letters of
credit under the New L/C Facility Documents, shall be deemed to be more
disadvantageous for purposes of this clause (a) without further notice or other
action by Agents), (b) the aggregate amount of Indebtedness and letters of
credit outstanding, and additional commitments to extend credit, if any, under
the New L/C Facility Agreement as refinanced, replaced, renewed or extended,
shall not exceed the aggregate amount of the commitments to extend credit in
effect under the New L/C Facility Agreement on the Closing Date, plus
$5,000,000, (c) the obligations under (and the Liens securing) such credit
agreement as refinanced, replaced, renewed or extended shall be subject to the
Intercreditor Agreement on terms substantively identical to the terms applicable
to the obligations in effect under the New L/C Facility Agreement on the Closing
Date, and (d) Company shall provide to Agents reasonable prior advance written
notice of such proposed refinancing, replacement, renewal or extension and
copies of all material contracts or other agreements being entered into in
connection therewith), in the case of clause (i) or (ii) as such credit
agreement may be amended, restated, supplemented or otherwise modified from time
to time to the extent permitted under subsection 7.12.
"NEW L/C FACILITY DOCUMENTS" means (i) the New L/C Facility
Agreement and (ii) the other "Credit Documents" as defined in the New L/C
Facility Agreement.
"9.25% DEBENTURES" means the "9.25% Debenture Claims" as such
term is defined in the Plan of Reorganization.
25
"NON-BORROWER CASH FLOW" means, for any period with respect to
Subsidiaries of Company that are not Borrowers, (i) the aggregate amount of cash
from such Subsidiaries paid as dividends or otherwise distributed to Borrowers,
minus (ii) the aggregate amount of cash expenditures made by such Subsidiaries
from amounts received from Borrowers to fund operations and capital expenditures
of such Subsidiaries (whether such amounts are received from Borrowers as the
proceeds of Indebtedness incurred by such non-Borrower Subsidiary or as the
proceeds of equity contributions or both). Amounts included in the calculation
of the Development Expenses with respect to a Project shall not be included in
the calculation of clause (ii) of Non-Borrower Cash Flow.
"NON-US LENDER" means a Lender that is organized under the
laws of any jurisdiction other than the United States or any state or other
political subdivision thereof.
"OBLIGATIONS" means all obligations of every nature of Credit
Parties under the Credit Documents, including any liability of such Credit Party
on any claim arising out of or relating to the Credit Documents, whether or not
the right to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed or contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any bankruptcy, insolvency,
reorganization or other similar proceeding. Without limiting the generality of
the foregoing, the Obligations of the Credit Parties under the Credit Documents
include (a) the obligation to pay principal, interest (including all interest
which accrues after the commencement of any case or proceeding in bankruptcy
after the insolvency of, or for the reorganization of, any Credit Party, whether
or not allowed in such case or proceeding), charges, expenses, fees, attorneys'
fees and disbursements, indemnities and other amounts payable by any Borrower
and any other Credit Party under any Credit Document and (b) the obligation to
reimburse any amount in respect of any of the foregoing that any Agent or any
Lender, in its sole discretion, may elect to pay or advance on behalf of such
Borrower or other Credit Party; provided, that nothing in this definition shall
be construed as creating any obligations of DHC under the Credit Documents that
are not expressly set forth in such Credit Documents.
"OFFICER" means the president, chief executive officer, a vice
president, chief financial officer, treasurer, general partner (if an
individual), managing member (if an individual) or other individual appointed by
the Governing Body or the Organizational Documents of a corporation,
partnership, trust or limited liability company to serve in a similar capacity
as the foregoing.
"OFFICER'S CERTIFICATE" means, as applied to any Person that
is a corporation, partnership, trust or limited liability company, a certificate
executed on behalf of such Person by one or more Officers of such Person or one
or more Officers of a general partner or a managing member if such general
partner or managing member is a corporation, partnership, trust or limited
liability company; provided, that any Officer's Certificate delivered pursuant
to subsection 2.3A(i)(h) or 6.1(v) shall be executed by a senior financial
officer of Company reasonably acceptable to Administrative Agent.
26
"ORGANIZATIONAL DOCUMENTS" means the documents (including
Bylaws, if applicable) pursuant to which a Person that is a corporation,
partnership, trust or limited liability company is organized.
"PARTICIPANT" means a purchaser of a participation in the
rights and obligations under this Agreement pursuant to subsection 10.1C.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to section 412 of the Internal Revenue Code
or section 302 of ERISA.
"PERFORMANCE GUARANTY" means any agreement entered into by
Company or any of its Subsidiaries under which Company or any such Subsidiary
guarantees the performance of a Subsidiary of Company under a principal lease,
service or operating agreement relating to a Project. The Existing IPP
International Project Guaranties shall not constitute Performance Guaranties.
"PERMANENT L/C OBLIGATION REDUCTION" means a cancellation,
termination or reduction in the amount of any Letter of Credit (including any
such reduction, cancellation or termination resulting from a drawing under such
Letter of Credit), other than such a cancellation, termination or reduction
concurrently with a reissuance of the relevant cancelled, terminated or reduced
portion of the applicable Letter of Credit pursuant to subsection 3.1B(i).
Notwithstanding the foregoing, any scheduled reduction in the stated amount of
any Letter of Credit shall be a Permanent L/C Obligation Reduction only to the
extent the maximum amount available for drawing at any time thereafter under
such Letter of Credit is permanently reduced.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien expressly prohibited
by any applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges
or claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens and
rights of set-off of banks, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed
by law, in each case incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and
that (in the case of any such amounts overdue for a period in excess of
5 days) are being contested in good faith by appropriate proceedings,
so long as (1) such reserves or other appropriate provisions, if any,
as shall be required by GAAP shall have been made for any such
contested amounts, and (2) in the case of a Lien with respect to any
portion of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral on account of
such Lien;
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(iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure
the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts, performance
and return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money), so long as no
foreclosure, sale or similar proceedings have been commenced with
respect to any portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an
Event of Default under subsection 8.8;
(v) leases or subleases granted to third parties in
accordance with any applicable terms of the Collateral Documents and
not interfering in any material respect with the ordinary conduct of
the business of Company or any of its Subsidiaries or resulting in a
material diminution in the value of any Collateral as security for the
Secured Obligations;
(vi) easements, rights-of-way, restrictions,
encroachments, and other minor defects or irregularities in title to
the real property of Company and its Subsidiaries, in each case which
do not and will not interfere in any material respect with the ordinary
conduct of the business of Company or any of its Subsidiaries or result
in a material diminution in the value of any Collateral as security for
the Secured Obligations;
(vii) any (a) interest or title of a lessor or sublessor
under any lease not prohibited by this Agreement, (b) restriction or
encumbrance that the interest or title of such lessor or sublessor may
be subject to, or (c) subordination of the interest of the lessee or
sublessee under such lease to any restriction or encumbrance referred
to in the preceding clause (b), so long as the holder of such
restriction or encumbrance agrees to recognize the rights of such
lessee or sublessee under such lease;
(viii) Liens arising from filing UCC financing statements
relating solely to leases not prohibited by this Agreement;
(ix) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(x) any zoning or similar law or right reserved to or
vested in any governmental office or agency to control or regulate the
use of any real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the ordinary
course of business of Company and its Subsidiaries; and
(xii) licenses of Intellectual Property granted by Company
or any of its Subsidiaries in the ordinary course of business and not
interfering in any material respect with the ordinary conduct of the
business of Company or such Subsidiary.
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Other Liens on assets of Borrowers and their Subsidiaries
permitted under this Agreement (which are not Permitted Encumbrances) are
described in subsection 7.2A.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"PETITION DATE" has the meaning assigned to that term in the
recitals to this Agreement.
"PLAN OF REORGANIZATION" means the Debtors' Second Joint Plan
of Reorganization under Chapter 11 of the Bankruptcy Code as filed with the
Bankruptcy Court on January 14, 2004 (and as revised and amended through March
2, 2004), together with the Reorganization Plan Supplement to Debtors' Second
Joint Plan of Reorganization filed with the Bankruptcy Court on February 18,
2004 in connection therewith.
"PLEDGED COLLATERAL" means the "Pledged Collateral" as defined
in the Security Agreement.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"PREPETITION CREDIT AGREEMENT" means the Revolving Credit and
Participation Agreement dated as of March 14, 2001, among Company, certain of
its Subsidiaries, the financial institutions listed on the signature pages
thereof, Deutsche Bank, as Documentation Agent, and Bank of America, as
Administrative Agent, as amended, restated, supplemented or otherwise modified
through the Closing Date and as it may hereafter be amended, restated,
supplemented or otherwise modified.
"PREPETITION CREDIT DOCUMENTS" means all "Loan Documents" as
defined in the Prepetition Credit Agreement.
"PREPETITION LENDERS" means the Persons identified as
"Lenders" under the Prepetition Credit Agreement, in their capacities as lenders
under the Prepetition Credit Agreement, together with their successors and
permitted assigns.
"PREPETITION OBLIGATIONS" means all "Obligations" as defined
in the Prepetition Credit Agreement.
"PREPETITION SECURED CLAIMS" means, collectively, the "Secured
Bank Claims" and the "9.25% Debenture Claims", as such terms are defined in the
Plan of Reorganization.
"PREPETITION UNSECURED CLAIMS" means "Parent and Holding
Company Unsecured Claims" that are "Allowed," as such terms are defined in the
Plan of Reorganization.
29
"PRIME RATE" means the rate that Bank of America announces
from time to time as its prime lending rate in effect for commercial borrowers
in the United States, as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Bank of America or any other Lender may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"PROCEEDINGS" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration.
"PROJECT" means any waste-to-energy facility, electrical
generation plant, cogeneration plant, water treatment facility or other facility
for the generation of electricity or engaged in another line of business in
which Company and its Subsidiaries are permitted to be engaged hereunder for
which a Subsidiary or Subsidiaries of Company (including CPIH Subsidiaries) was,
is or will be (as the case may be) an owner, operator, manager or builder, and
shall also mean any two or more of such plants or facilities in which an
interest has been acquired in a single transaction, so long as such interest
constitutes an existing Investment on the Closing Date permitted under this
Agreement; provided, however, that a Project shall cease to be a Project of
Company and its Subsidiaries at such time that Company or any of its
Subsidiaries ceases to have any existing or future rights or obligations
(whether direct or indirect, contingent or matured) associated therewith.
"PRO RATA SHARE" means, with respect to any Lender, the
percentage obtained by dividing (i) the Letter of Credit Exposure of that Lender
by (ii) the aggregate Letter of Credit Exposure of all Lenders, in any such case
as the applicable percentage may be adjusted by assignments permitted pursuant
to subsection 10.1. The initial Pro Rata Share of each Lender is set forth
opposite the name of that Lender in Schedule 2.1 annexed hereto.
"PTO" means the United States Patent and Trademark Office or
any successor or substitute office in which filings are necessary or, in the
opinion of Administrative Agent, desirable in order to create or perfect Liens
on any IP Collateral.
"PURPA" means the Public Utility Regulatory Policies Act of
1978, as amended.
"RCRA" means the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Section 6901 et seq.), or any successor statute, and all
implementing regulations promulgated thereunder.
"REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by any Borrower in any real property.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been recorded in
all places necessary or desirable, in Administrative Agent's reasonable
judgment, to give constructive notice of such Leasehold Property to third-party
purchasers and encumbrancers of the affected real property. For purposes of this
definition, the term "RECORD DOCUMENT" means, with respect to any Leasehold
Property, (a) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real property,
as lessor, or (b) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest,
30
the applicable assignment or sublease document, executed and acknowledged by
such holder, in each case in form sufficient to give such constructive notice
upon recordation and otherwise in form reasonably satisfactory to Administrative
Agent.
"REGISTER" has the meaning assigned to that term in subsection
2.1B.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED AGREEMENTS" means the New L/C Facility Documents, the
High Yield Indenture, the High Yield Notes, the Corporate Services Reimbursement
Agreement, the Management Services and Reimbursement Agreement and the DHC Tax
Sharing Agreement, as such agreements and instruments may be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
under subsection 7.12.
"RELEASE" means any releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, disposing, depositing or migrating of Hazardous Materials into the
indoor or outdoor environment (including the abandonment, discarding or disposal
of any barrels, containers or other closed receptacles containing any Hazardous
Materials), including the movement of any Hazardous Materials through the air,
soil, surface water or groundwater.
"REQUEST FOR ISSUANCE" means a request substantially in the
form of Exhibit III annexed hereto.
"REQUISITE DIP LENDERS" means DIP Lenders having or holding
more than 50% of the aggregate credit exposure under the DIP Tranche A L/Cs and
the DIP Tranche X X/Cs.
"REQUISITE LENDERS" means Lenders having or holding more than
50% of the aggregate Letter of Credit Exposure of all Lenders, provided,
however, that prior to the Closing Date, for purposes of this definition the
Letter of Credit Exposure of each Lender shall equal the original Letter of
Credit Commitment of such Lender on the Closing Date.
"RESTRICTED ACCOUNT" means any account that is either (i) a
collateral account, debt service reserve account or other Deposit Account to
which the access of Company and its Subsidiaries is restricted pursuant to a
valid and enforceable Contractual Obligation, so long as such account is (a)
related to a Project of Company and its Subsidiaries, (b) is required to be
opened or maintained by Company or any of its Subsidiaries pursuant to a
Contractual Obligation binding on such Person and (c) is permitted to be
maintained under this Agreement, or (ii) a reserve account established in
accordance with the Approved Plan of Reorganization.
"RESTRICTED PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company
31
now or hereafter outstanding, and (iv) any payment or prepayment of principal
of, premium, if any, or interest on, or redemption, purchase, retirement,
defeasance (including in-substance or legal defeasance), sinking fund or similar
payment with respect to, any Indebtedness of Company and its Subsidiaries other
than (a) the Obligations, (b) Indebtedness owed by a Subsidiary to a Borrower,
(c) Indebtedness under the New L/C Facility Documents or the High Yield Notes,
and (d) other amounts required to be paid under this Agreement.
"SECURED OBLIGATIONS" means the obligations secured by the
Collateral pursuant to the Collateral Documents.
"SECURED PARTIES" means the "Secured Parties" as defined in
the Intercreditor Agreement.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated, certificated or uncertificated, or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SECURITIES ACCOUNT" means an account to which a financial
asset is or may be credited in accordance with an agreement under which the
Person maintaining the account undertakes to treat the Person for whom the
account is maintained as entitled to exercise the rights that comprise the
financial asset.
"SECURITY AGREEMENT" means the Security Agreement executed and
delivered on the Closing Date by Credit Parties (except as otherwise
contemplated in subsection 5.18) other than DHC, substantially in the form of
Exhibit VII annexed hereto, as such Security Agreement may thereafter be
amended, restated, supplemented or otherwise modified from time to time.
"SEIU PENSION PLAN" means the Pension Plan referred to
generally by Company on and prior to the Closing Date as the "Service Employees
International Union Pension Trust for Employees of Allied Plant Maintenance
Company, Inc. Defined Benefit Pension Plan".
"SOLVENT" means, with respect to any Person, that as of the
date of determination, in light of all of the facts and circumstances existing
at such time, (i) the then fair saleable value of the property of such Person is
(a) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (b) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and due considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due. For purposes of this
definition, the amount of any contingent liability at any
32
time shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"SUBORDINATED INDEBTEDNESS" means, collectively, (i)
Indebtedness under the Unsecured Creditor Notes and the Unsecured Creditor Notes
Indenture, and (ii) any other Indebtedness of Company or any of its Subsidiaries
incurred from time to time and subordinated by its terms in right of payment to
the Obligations.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, trust, limited liability company, association, joint
venture or other business entity of which more than 50% of the total voting
power of shares of stock or other ownership interests entitled (without regard
to the occurrence of any contingency) to vote in the election of the members of
the Governing Body is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof. Any reference contained herein to one or more Subsidiaries
of Company or of Company's Domestic Subsidiaries shall, unless otherwise
expressly indicated, not include any CPIH Subsidiaries and Greenway Insurance
Company of Vermont.
"SWEEP DATE" has the meaning assigned to that term in
subsection 2.3A(i)(f).
"SYNTHETIC LEASE OBLIGATION" means the monetary obligation of
a Person under (i) a so-called synthetic, off-balance sheet or tax retention
lease, or (ii) an agreement for the use or possession of property creating
obligations that do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).
"TAMPA SUBSIDIARIES" means Covanta Tampa Construction, Inc., a
Delaware corporation, and Covanta Tampa Bay, Inc., a Florida corporation.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed, including interest, penalties, additions to tax and any
similar liabilities with respect thereto; except that, in the case of a Lender,
there shall be excluded franchise taxes and all taxes that are imposed on the
overall income or profits of such Lender by the United States or by any other
Government Authority under the laws of which Lender is organized or has its
principal office or maintains its applicable lending office.
"TAX NOTE" has the meaning assigned to that term in subsection
4.1F(iv).
"TOTAL DEBT" means, as at any date of determination, (i) the
aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP, minus
(ii) the amounts of "Current portion of project debt" and "Project Debt",
whether such line items are so titled or otherwise titled, as such line items
are or would be reflected in Company's consolidated balance sheet as at such
date prepared in conformity with GAAP and reported in a manner consistent with
Company's reporting of such amounts in its quarterly or annual report (as the
case may be) on Form 10Q or
33
10K, respectively, prior to the Closing Date, minus (iii) any portion of
Indebtedness of Company and its Subsidiaries under the CPIH Stock Pledge
Agreement or the Corporate Services Reimbursement Agreement included in the
amount described in clause (i) above, minus (iv) any portion of the amount
described in clause (i) above that represents a funded drawing under a letter of
credit (otherwise permitted to be outstanding under this Agreement) supporting
obligations of Company and its Subsidiaries (including CPIH Subsidiaries) in
respect of the Quezon Project.
"TREASURY REGULATIONS" means the Treasury Regulations
promulgated under the Internal Revenue Code.
"TSCA" means the Toxic Substances Control Act of 1976, as
amended (15 U.S.C. Section 2601 et seq.), or any successor statute, and all
implementing regulations promulgated thereunder.
"UBS BANK" means UBS AG, Stamford Branch.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"UNDERWRITING LENDER" means Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated.
"UNITED STATES" means the United States of America.
"UNSECURED CREDITOR NOTES" has the meaning assigned to that
term in subsection 4.1F(iv).
"UNSECURED CREDITOR NOTES INDENTURE" means the Indenture
pursuant to which the Unsecured Creditor Notes are issued.
"XXXXXX SUBSIDIARIES" means Covanta Xxxxxx Energy Resource Co.
LP, a Delaware limited partnership, Covanta Xxxxxx Holdings I, Inc., a Virginia
corporation, and Covanta Xxxxxx Holdings II, Inc., a California corporation.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF
CALCULATIONS UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (iii) and
(iv) of subsection 6.1 shall be prepared in accordance with GAAP as in effect at
the time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 6.1(vi)). Except as otherwise permitted by
this Agreement, calculations in connection with the definitions, covenants and
other provisions of this Agreement shall utilize GAAP as in effect on the date
of determination, applied in a manner consistent with that used in preparing the
financial statements referred to in subsection 5.3. If at any time any change in
GAAP would affect the computation of any financial ratio or requirement set
forth in
34
any Credit Document, and Company, Administrative Agent or Requisite Lenders
shall so request, Administrative Agent, Lenders and Company shall negotiate in
good faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of Requisite
Lenders), provided that, until so amended, such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and
Company shall provide to Administrative Agent and Lenders reconciliation
statements provided for in subsection 6.1(vi).
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference.
B. References to "Sections" and "subsections" shall be
to Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided.
C. The use in any of the Credit Documents of the word
"include" or "including", when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
SECTION 2. AMOUNT OF COMMITMENTS; CERTAIN TERMS OF PAYMENT AND REPAYMENT
2.1 LETTER OF CREDIT COMMITMENTS; REGISTER; DEFAULT RATE;
COMPUTATION OF INTEREST; MAXIMUM RATE.
A. LETTER OF CREDIT COMMITMENTS. Subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties of Borrowers herein set forth, each Lender agrees to purchase in
accordance with subsection 3.1C participations in each Letter of Credit and any
drawings honored thereunder, in an aggregate amount not exceeding its Pro Rata
Share of the Letter of Credit Commitments. The original amount of each Lender's
Letter of Credit Commitment is set forth opposite its name on Schedule 2.1
annexed hereto and the aggregate original amount of the Letter of Credit
Commitments is $138,191,554.19; provided, however, that the Letter of Credit
Commitments of Lenders shall be adjusted to give effect to any assignments of
the Letter of Credit Commitments pursuant to subsection 10.1B and shall be
reduced from time to time by the amount of any reductions thereto made pursuant
to subsection 2.3. Each Lender's Letter of Credit Commitment shall expire on the
Maturity Date.
B. THE REGISTER. Administrative Agent, acting for these
purposes solely as an agent of Borrowers (it being acknowledged that
Administrative Agent, in such capacity, and its officers, directors, employees,
agent and affiliates shall constitute Indemnitees under subsection 10.3), shall
maintain (and make available for inspection by Borrowers and Lenders upon
reasonable prior notice at reasonable times) at its address referred to in
subsection 10.8 a register for the recordation of, and shall record, the names
and addresses of Lenders and the
35
Letter of Credit Commitment and participations in Letters of Credit of each
Lender from time to time (the "REGISTER"). Borrowers, Administrative Agent and
Lenders shall deem and treat the Persons listed as Lenders in the Register as
the holders and owners of the corresponding Letter of Credit Commitments and
participations listed therein for all purposes hereof; all amounts owed with
respect to any Letter of Credit Commitment or participation shall be owed to the
Lender listed in the Register as the owner thereof; and any request, authority
or consent of any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be conclusive
and binding on any subsequent holder, assignee or transferee of the
corresponding Letter of Credit Commitment or participation. Each Lender shall
record on its internal records the amount of its participations and Letter of
Credit Commitment and each payment in respect hereof, and any such recordation
shall be conclusive and binding on Borrowers, absent manifest error, subject to
the entries in the Register, which shall, absent manifest error, govern in the
event of any inconsistency with any Lender's records. Failure to make any
recordation in the Register or in any Lender's records, or any error in such
recordation, shall not affect any participations or Letter of Credit Commitments
or any Obligations in respect of any participations.
C. DEFAULT RATE. Upon the occurrence and during the
continuation of any Event of Default, any fees and other amounts then due and
payable hereunder (but not including amounts drawn under any Letter of Credit
that are not reimbursed by Borrowers when required under subsection 3.3) shall
thereafter bear interest (including post petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate equal to the Base Rate plus 5.00% per annum. Payment or
acceptance of the increased rates of interest provided for in this subsection
2.1C is not a permitted alternative to timely payment and shall not constitute a
waiver of any Event of Default or otherwise prejudice or limit any rights or
remedies of Administrative Agent or any Lender.
D. COMPUTATION OF INTEREST. Interest on amounts bearing
interest with reference to the Base Rate shall be computed on the basis of a
360-day year, for the actual number of days elapsed in the period during which
it accrues. In computing interest on any amount funded in a drawing under a
Letter of Credit, the date of the funding of such drawing shall be included; and
the date of payment of such funded drawing shall be excluded; provided that if a
funded drawing is repaid on the same day on which it is made, one day's interest
shall be paid on that funded drawing.
E. MAXIMUM RATE. Notwithstanding the foregoing
provisions of this subsection 2.1, in no event shall the rate of interest
payable by Borrowers with respect to any funded drawing under any Letter of
Credit exceed the maximum rate of interest permitted to be charged under
applicable law.
2.2 FEES.
A. FACILITY FEES. Borrowers, jointly and severally,
agree to pay to Administrative Agent on the Closing Date, for distribution to
each Lender, a facility fee in an amount equal to 1.0% of the Letter of Credit
Commitment of such Lender as of the Closing Date.
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B. OTHER FEES. Borrowers, jointly and severally, agree
to pay to Agents such fees in the amounts and at the times separately agreed
upon between Company and Agents. All fees referenced in this subsection 2.2
shall be earned when payable and shall be non-refundable.
2.3 MANDATORY PAYMENTS, REDUCTIONS IN COMMITMENTS; GENERAL
PROVISIONS REGARDING PAYMENTS; APPLICATION OF PROCEEDS OF
COLLATERAL.
A. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS.
(i) Mandatory Payments. Mandatory Payments shall be made
in the amounts and under the circumstances set forth below, all such
Mandatory Payments to be applied as set forth below or as more
specifically provided in subsection 2.3A(ii), except to the extent the
Intercreditor Agreement requires application thereof in a different
manner than as set forth in this subsection 2.3A(i) or subsection
2.3A(ii):
(a) Net Asset Sale Proceeds. No later than two
days after the date of receipt by Company or any of its
Subsidiaries of any Net Asset Sale Proceeds in respect of any
Asset Sale, Company shall make a Mandatory Payment in an
aggregate amount equal to (1) to the extent that aggregate Net
Asset Sale Proceeds in respect of all Asset Sales made on or
prior to such date is $7,500,000 or less, 33.33% of such Net
Asset Sale Proceeds, or (2) to the extent that aggregate Net
Asset Sale Proceeds in respect of all Asset Sales made on or
prior to such date exceeds $7,500,000, 100% of such excess
(without duplication).
(b) Net Insurance/Condemnation Proceeds. No
later than the fifth Business Day following the date of
receipt by Administrative Agent or by Company or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds that
are required to be used for a Mandatory Payment pursuant to
the provisions of subsection 6.4C, Company shall make a
Mandatory Payment in an aggregate amount equal to the amount
of such Net Insurance/Condemnation Proceeds.
(c) Issuance of Indebtedness. On the date of
receipt of the Net Indebtedness Proceeds from the issuance of
any Indebtedness of Company or any of its Subsidiaries after
the Closing Date, other than Indebtedness permitted pursuant
to subsections 7.1(i) through (xvi), Company shall make a
Mandatory Payment in an aggregate amount equal to such Net
Indebtedness Proceeds.
(d) Tax Refunds. If after the Closing Date,
Company or any of its Subsidiaries receives any payment of a
cash refund or rebate of any Tax, the Borrowers shall no later
than the Business Day following the date of receipt of such
refund or rebate make a Mandatory Payment in the amount of
such Tax refund or rebate, except to the extent such
application would constitute a material violation of a valid
Contractual Obligation in connection with a Project of Company
or any of its Subsidiaries to remit such refund or rebate to
the client of such Project.
(e) Annual Free Cash Flow. In the event that
there shall be Annual Free Cash Flow for any Fiscal Year
(commencing with Fiscal Year 2004),
37
Company shall, no later than 60 days after the end of such
Fiscal Year, make a Mandatory Payment in an aggregate amount
equal to 50% (or, during the continuance of an Event of
Default, 100%) of such Annual Free Cash Flow; provided,
however, that the amount of such Mandatory Payment shall be
reduced by the amount of cash, if any, applied to cash
collateralize Letter of Credit Exposure pursuant to subsection
2.3A(i)(f) during the four Fiscal Quarters most recently
preceding the date of such Mandatory Payment.
(f) Excess Cash. Any amounts on deposit in the
Cash Management System (such amounts, in any event, not to
include amounts, if any, on deposit in the Collateral Accounts
or required to be held in Deposit Accounts which are
Restricted Accounts described on Schedule 2.3A(i)(f) annexed
hereto, as said Schedule 2.3A(i)(f) may be supplemented from
time to time pursuant to the provisions of subsection
6.1(xvii)) (the aggregate of such amounts on deposit at any
time (excluding any amounts on deposit in accounts set forth
on said Schedule at such time) being referred to herein as
"CASH ON HAND") in excess of $60,000,000 (plus the Closing
Date Retained Amount) for each Sweep Date (as defined below)
in 2004 and 2005, $70,000,000 (plus the Closing Date Retained
Amount) for each Sweep Date in 2006, $75,000,000 (plus the
Closing Date Retained Amount) for each Sweep Date in 2007 and
$80,000,000 (plus the Closing Date Retained Amount) for each
Sweep Date in 2008, on June 30 and December 31 of each of the
aforementioned years (each such date, a "SWEEP DATE"), shall
be applied on the next succeeding Business Day to repay funded
amounts, if any, under the Letters of Credit and then to cash
collateralize the Letters of Credit and the Letter of Credit
Commitments under the Collateral Account Agreement in an
amount, taken together with all then existing cash collateral
for the Letter of Credit Commitments, equal to 105% of the
Letter of Credit Commitments.
(g) Prepayments Due to Certain Changes of
Control. Upon the date on which any "change of control" or
"change in control" or event, however titled, shall occur that
requires under the High Yield Indenture a repurchase of the
High Yield Notes or an offer to repurchase High Yield Notes as
a result of a change in ownership of all or some portion of
the Capital Stock of Company or any of its Subsidiaries or all
or substantially all of the assets of Company and its
Subsidiaries, (1) Borrowers shall repay all funded amounts, if
any, under the Letters of Credit, then deposit into the
Collateral Account an amount equal to 105% of the maximum
amount that may at any time be drawn under all Letters of
Credit then outstanding (whether or not any beneficiary under
any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other
documents or certificates required to draw under such Letter
of Credit), and (2) the right or obligation of any Issuing
Lender to issue, renew or extend any Letter of Credit
hereunder shall terminate.
(h) Calculations of Net Proceeds Amounts;
Additional Prepayments and Reductions Based on Subsequent
Calculations. Concurrently with the receipt of any amount
which would require a Mandatory Payment pursuant to
38
subsections 2.3A(i)(a) - (f), Company shall deliver to
Administrative Agent an Officer's Certificate demonstrating
the calculation of the amount of the applicable Net Asset Sale
Proceeds, Net Insurance/Condemnation Proceeds, Net
Indebtedness Proceeds, cash in the Cash Management System,
Annual Free Cash Flow or Tax refund or rebate, as the case may
be, that gave rise to such Mandatory Payment. In the event
that Company shall subsequently determine that the actual
amount was greater than the amount set forth in such Officer's
Certificate, Company shall promptly make an additional
Mandatory Payment in an amount equal to the amount of such
excess, and Company shall concurrently therewith deliver to
Administrative Agent an Officer's Certificate demonstrating
the derivation of the additional amount resulting in such
excess.
(ii) Application of Prepayments.
(a) Application of Prepayments. Except as
provided in subsection 2.3C and the last sentence of this
subsection 2.3A(ii)(a) and to the extent the Intercreditor
Agreement requires application of such Mandatory Payment in a
different manner than as set forth in this sentence, any
Mandatory Payments made pursuant to subsections 2.3A(i)(a) -
(e) shall be applied to repay funded amounts, if any, under
the Letters of Credit and then to cash collateralize the
Letters of Credit and the Letter of Credit Commitments under
the Collateral Account Agreement in an amount, taken together
with all then existing cash collateral for the Letter of
Credit Commitments, equal to 105% of the Letter of Credit
Commitments. Notwithstanding the foregoing, Borrowers and
Lenders hereby agree that any cash applied to collateralize
Letter of Credit Exposure pursuant to subsection 2.3A(i)(f)
with respect to a cash balance on June 30 or December 31 of
any Fiscal Year (the "SUBJECT FISCAL YEAR") shall, in the
event that the amount of such cash applied to collateralize
Letter of Credit Exposure exceeds 50% of the Annual Free Cash
Flow for the Subject Fiscal Year, be released to Borrowers to
the extent of such excess (but in no event shall more cash be
so released than the aggregate amount applied pursuant to
subsection 2.3A(i)(f) with respect to the Subject Fiscal Year)
after the 60th day of the following Fiscal Year, promptly
following Borrowers' certification of such excess; provided,
however, that such release shall not be required if, at the
time such release would otherwise be required, an Event of
Default shall have occurred and be continuing; and provided,
further, that to the extent the Intercreditor Agreement
requires application of such amounts in a different manner
than as set forth in this sentence, such amounts shall be
applied in accordance with the Intercreditor Agreement.
39
(iii) Mandatory Reduction of Letter of Credit Commitments.
Immediately upon the occurrence of any Permanent L/C Obligation
Reduction, the Letter of Credit Commitments shall be permanently
reduced in an amount equal to the amount of such Permanent L/C
Obligation Reduction, and such reduction of the Letter of Credit
Commitments shall reduce each Lender's Letter of Credit Commitment
ratably.
B. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Borrowers
of principal, interest, fees and other Obligations shall be made in
Dollars in same day funds, without defense, setoff or counterclaim,
free of any restriction or condition, and delivered to Administrative
Agent not later than 12:00 Noon (New York City time) on the date due at
the Funding and Payment Office for the account of Lenders; funds
received by Administrative Agent after that time on such due date shall
be deemed to have been paid by Borrowers on the next succeeding
Business Day. Each Borrower hereby authorizes Administrative Agent to
charge its accounts with Administrative Agent in order to cause timely
payment to be made to Administrative Agent of all principal, interest,
fees and expenses due hereunder (subject to sufficient funds being
available in its accounts for that purpose). Anything contained herein
to the contrary notwithstanding, Borrowers jointly and severally
promise to repay all honored drawings under the Letters of Credit when
due in accordance with the terms hereof and agree that, to the extent
any Letters of Credit have not been returned and cancelled, on the
Maturity Date (a) the unpaid principal amount of, and accrued interest
on, any funded amounts under such Letters of Credit, (b) an amount
equal to the maximum available amount that may at any time on or after
such date be drawn under all such Letters of Credit then outstanding
(whether or not any beneficiary under any such Letter of Credit shall
have presented, or shall be entitled at such time to present, the
drafts or other documents or certificates required to draw under such
Letter of Credit), and (c) all other Obligations shall automatically
become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby
expressly waived by Borrowers, and any amounts so due and payable with
respect to Letters of Credit shall be cash collateralized in an amount
equal to 105% of the amount thereof.
(ii) Application of Payments to Principal and Interest.
All payments in respect of any honored drawing under a Letter of Credit
shall include payment of accrued interest on the principal amount being
repaid or prepaid, and all such payments shall be applied to the
payment of interest before application to principal.
(iii) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment
fees hereunder, as the case may be.
C. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS
AFTER EVENT OF DEFAULT. Except to the extent the Intercreditor Agreement
requires application in a different manner than as set forth in this subsection
2.3C, upon the occurrence and during the continuation
40
of an Event of Default, either if requested by Requisite Lenders or upon
termination of the Letter of Credit Commitments (a) all Mandatory Payments or
other payments received on account of the Obligations, whether from any Borrower
or otherwise, shall be applied by Administrative Agent against the Obligations
and (b) all proceeds received by Administrative Agent in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
may, in the discretion of Administrative Agent, be held by Administrative Agent
as Collateral for, and/or (then or at any time thereafter) applied in full or in
part by Administrative Agent against, the applicable Secured Obligations (as
defined in the Collateral Documents), in each case in the following order of
priority:
(i) to the payment of all costs and expenses of such
sale, collection or other realization, all other expenses, liabilities
and advances made or incurred by Administrative Agent in connection
therewith, and all amounts for which Agents are entitled to
compensation (including the fees described in subsection 2.2),
reimbursement and indemnification under any Credit Document and all
advances made by Administrative Agent thereunder for the account of the
applicable Credit Party, and to the payment of all costs and expenses
paid or incurred by Administrative Agent in connection with the Credit
Documents, all in accordance with subsections 9.4, 10.2 and 10.3 and
the other terms of this Agreement and the Credit Documents;
(ii) thereafter, to the extent of any excess such
proceeds, first, to repay owed and outstanding amounts (subject to the
provisions of subsection 2.3B(ii) hereof) with respect to Letter of
Credit Exposure, with the remainder applied to cash collateralize
Letter of Credit Exposure and unutilized Letter of Credit Commitments
(it being understood that for purposes of this clause (ii), the portion
of such Letter of Credit Exposure that consists of unutilized Letter of
Credit Commitments or undrawn amounts under outstanding Letters of
Credit shall be measured at 105% of the amount thereof), for the
ratable benefit of the holders thereof; and
(iii) thereafter, to the extent of any excess such
proceeds, to the payment to or upon the order of such Credit Party or
to whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct.
2.4 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS. Subject to the
provisions of subsection 2.4B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender (including any Issuing
Lender) shall determine (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto) that any law, treaty
or governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or other Government Authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other Government Authority (whether or not having the force of
law):
41
(i) subjects such Lender to any additional Tax (other
than any withholding tax with respect to which subsection 2.4B applies)
with respect to this Agreement or any of its obligations hereunder
(including with respect to issuing or maintaining any Letters of Credit
or purchasing or maintaining any participations therein or maintaining
any Letter of Credit Commitment hereunder) or any payments to such
Lender of principal, interest, fees or any other amount payable
hereunder;
(ii) imposes, modifies or holds applicable any reserve,
special deposit, compulsory loan, insurance charge or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such
Lender; or
(iii) imposes any other condition (other than with respect
to Taxes) on or affecting such Lender or its obligations hereunder;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining its Letter of Credit Commitments or
agreeing to issue, issuing or maintaining any Letter of Credit or agreeing to
purchase, purchasing or maintaining any participation therein or to reduce any
amount received or receivable by such Lender with respect thereto; then, in any
such case, Borrowers shall promptly pay, on a joint and several basis, to such
Lender, upon receipt of the statement referred to in subsection 2.5A, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
on an after-tax basis for any such increased cost or reduction in amounts
received or receivable hereunder.
B. TAXES.
(i) Payments to Be Free and Clear. All sums payable by
Borrowers under this Agreement and the other Credit Documents shall be
paid free and clear of, and without any deduction or withholding on
account of, any Tax imposed, levied, collected, withheld or assessed by
or within the United States or any political subdivision in or of the
United States or any other jurisdiction from or to which a payment is
made by or on behalf of Borrowers or by any federation or organization
of which the United States or any such jurisdiction is a member at the
time of payment.
(ii) Grossing-up of Payments. If any Borrower or any other
Person is required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by Borrowers to
Administrative Agent or any Lender under any of the Credit Documents:
(a) Borrowers shall notify Administrative Agent
of any such requirement or any change in any such requirement
as soon as Borrowers become aware of it (it being understood
and agreed that no such notice shall be required with respect
to Canadian Lenders, if any);
(b) Borrowers shall pay any such Tax when such
Tax is due, such payment to be made (if the liability to pay
is imposed on any Borrower) for their
42
own account or (if that liability is imposed on Administrative
Agent or such Lender, as the case may be) on behalf of and in
the name of Administrative Agent or such Lender;
(c) the sum payable by Borrowers in respect of
which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to ensure
that, after the making of that deduction, withholding or
payment, Administrative Agent or such Lender, as the case may
be, receives on the due date a net sum equal to what it would
have received had no such deduction, withholding or payment
been required or made; and
(d) within 30 days after paying any sum from
which any or all of them are required by law to make any
deduction or withholding, and within 30 days after the due
date of payment of any Tax which any or all of them are
required by clause (b) above to pay, Borrowers shall deliver
to Administrative Agent evidence satisfactory to the other
affected parties of such deduction, withholding or payment and
of the remittance thereof to the relevant taxing or other
authority.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws
of any jurisdiction other than the United States or any state
or other political subdivision thereof (for purposes of this
subsection 2.4B(iii), a "NON-US LENDER") shall (1) to the
extent such Non-US Lender is not a Canadian Lender, deliver to
Administrative Agent and to Company, on or prior to the
Closing Date (in the case of each Lender listed on the
signature pages hereof) or on or prior to the date of the
Assignment Agreement pursuant to which it becomes a Lender (in
the case of each other Lender), and at such other times as may
be necessary in the determination of Company or Administrative
Agent (each in the reasonable exercise of its discretion), two
original copies of Internal Revenue Service Form W-8BEN or
W-8ECI (or any successor forms) properly completed and duly
executed by such Lender, together with any other certificate
or statement of exemption required under the Internal Revenue
Code or the regulations issued thereunder to establish that
such Lender is not subject to United States withholding tax
with respect to any payments to such Lender of interest
payable under any of the Credit Documents, and (2) to the
extent such Non-US Lender is a Canadian Lender, deliver to
Administrative Agent and to Company, on or prior to the
Closing Date (in the case of each Canadian Lender listed on
the signature pages hereof) or on or prior to the date of the
Assignment Agreement pursuant to which it becomes a Canadian
Lender (in the case of each other Canadian Lender), and at
such other times as may be necessary in the determination of
Company or Administrative Agent (each in the reasonable
exercise of its discretion), two original copies of any forms,
properly completed and duly executed by such Lender, required
under the Internal Revenue Code or the regulations issued
thereunder to establish that such Canadian Lender is eligible
for a reduced withholding tax rate under the "Convention
Between the United States of America and Canada with Respect
to Taxes on Income and Capital" or any successor thereto.
43
(b) Each Non-US Lender hereby agrees, from time
to time after the initial delivery by such Lender of such
forms, whenever a lapse in time or change in circumstances
renders such forms, certificates or other evidence so
delivered obsolete or inaccurate in any material respect, that
such Lender shall promptly (1) deliver to Administrative Agent
and to Company two original copies of renewals, amendments or
additional or successor forms, properly completed and duly
executed by such Lender, together with any other certificate
or statement of exemption required in order to confirm or
establish that such Lender is not subject to United States
withholding tax with respect to payments to such Lender under
the Credit Documents (or, if such Lender is a Canadian Lender,
to confirm or establish that such Lender is eligible for the
relevant reduced withholding tax rate) or (2) notify
Administrative Agent and Company of its inability to deliver
any such forms, certificates or other evidence.
(c) Borrowers shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.4B(ii) if such Lender shall have failed to
satisfy the requirements of clause (a) or (b)(1) of this
subsection 2.4B(iii); provided that if such Lender shall have
satisfied the requirements of subsection 2.4B(iii)(a) on the
date such Lender became a Lender, nothing in this subsection
2.4B(iii)(c) shall relieve Borrowers of their obligation to
pay any amounts pursuant to subsection 2.4B(ii)(c) in the
event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any
change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to
withholding as described in subsection 2.4B(iii)(a) (or, if
such Lender is a Canadian Lender, establishing the fact that
such Lender is eligible for the relevant reduced withholding
tax rate).
(d) Notwithstanding anything contained in this
subsection to the contrary, Borrowers shall be required to pay
additional amounts to each Canadian Lender under clause (c) of
subsection 2.4B(ii) with respect to any Credit Exposure held
by such Canadian Lender in its capacity as a Canadian Lender
notwithstanding that such Lender fails to deliver forms,
certificates or other evidence establishing the fact that such
Lender is not subject to withholding as described in
subsection 2.4B(iii)(a)(1).
(iv) Indemnity for Withheld Amounts. Borrowers hereby
agree to indemnify Lenders and Agents for the full amount of any
deduction or withholding on account of any Taxes imposed, levied,
collected, withheld or assessed by or within the United States or any
political subdivision in or of the United States or any other
jurisdiction from or to which a payment is made by or on behalf of
Borrowers or by any federation or organization of which the United
States or any such jurisdiction is a member at the time of payment
(including any such Taxes imposed by any jurisdiction on amounts
payable under this subsection 2.4B) that Borrowers are required to pay
pursuant to subsection 2.4B(ii) but were paid by Agents or Lenders with
respect to sums payable by Borrowers under this Agreement and the other
Credit Documents and any liability
44
(including penalties, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made promptly, and in
any event within 10 days after, the relevant Lender or Agent makes
demand therefor in writing.
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after the
date hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any Government Authority charged with the
interpretation or administration thereof, or compliance by any Lender with any
guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such Government Authority, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Letter of Credit Commitments, Letters of Credit, participations
therein or other Obligations to a level below that which such Lender or such
controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within five Business Days
after receipt by Borrowers from such Lender of the statement referred to in
subsection 2.5A, Borrowers shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction.
2.5 STATEMENT OF LENDERS; OBLIGATION OF LENDERS AND ISSUING
LENDERS TO MITIGATE.
A. STATEMENTS. Each Lender claiming compensation or
reimbursement pursuant to subsection 2.4 or 2.5B shall deliver to Company (with
a copy to Administrative Agent) a written statement, setting forth in reasonable
detail the basis of the calculation of such compensation or reimbursement, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error; provided that a Lender claiming compensation or reimbursement
pursuant to subsection 2.4B(ii) due to circumstances in effect as of the Closing
Date shall not be required to deliver more than one such statement to Borrowers
or Administrative Agent, and such statement shall remain effective with respect
to this Agreement until all Obligations have been paid in full.
B. MITIGATION. Each Lender (including any Issuing
Lender) agrees that, as promptly as practicable after the officer of such Lender
or Issuing Lender responsible for administering the Letters of Credit of such
Lender or Issuing Lender, as the case may be, becomes aware of the occurrence of
an event or the existence of a condition that would entitle such Lender or
Issuing Lender to receive payments under subsection 2.4 (other than subsection
2.4B(ii)), it will use reasonable efforts to make, issue, fund or maintain the
Letter of Credit Commitments of such Lender or the Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, if (i) as a result thereof the additional amounts
which would otherwise be required to be paid to such Lender or Issuing Lender
pursuant to subsection 2.4 would be materially reduced and (ii) as determined by
such Lender or Issuing Lender in its sole discretion, such action would not
otherwise be disadvantageous to such Lender or Issuing Lender; provided that
such Lender or Issuing Lender will not be obligated to utilize such other
lending or letter of credit office
45
pursuant to this subsection 2.5B unless Borrowers agree to pay, on a joint and
several basis, all incremental expenses incurred by such Lender or Issuing
Lender as a result of utilizing such other lending or letter of credit office as
described above.
2.6 DEFAULTING LENDER.
Anything contained herein to the contrary notwithstanding, in
the event that any Lender (any such Lender being a "DEFAULTING LENDER") defaults
(a "FUNDING DEFAULT") in its obligation to fund its participation in any Letter
of Credit (a "DEFAULTED PARTICIPATION") in accordance with the terms of this
Agreement or defaults in its obligation to comply with the agreements contained
in subsection 10.1H, then (i) during any Default Period (as defined below) with
respect to such Defaulting Lender, such Defaulting Lender shall not be deemed a
"Lender" for purposes of voting on any matters (including the granting of any
consents or waivers) with respect to any of the Credit Documents (provided,
however, that nothing in this clause (i) shall be construed as permitting,
without the consent of the relevant Defaulting Lender, a reduction in the
principal amount of such Defaulting Lender's outstanding funded Obligations, an
increase in the amount of such Lender's Letter of Credit Commitment or
participation in any Letters of Credit, a reduction or postponement of the due
date of any amount funded by such Defaulting Lender and payable in respect of
any Letter of Credit, an extension of the expiration date of any Letter of
Credit beyond the Maturity Date, or an extension of the Maturity Date), (ii)
solely in the case of a Funding Default, to the extent permitted by applicable
law, until such time as the Default Excess (as defined below) with respect to
such Defaulting Lender shall have been reduced to zero, any payment or
reimbursement of amounts with respect to a drawing under a Letter of Credit
shall be applied first, to amounts funded by Agents, Issuing Lenders or other
Lenders (together with unpaid interest accrued thereon) in lieu of such amounts
required to be funded by Defaulting Lenders and second, to the Letter of Credit
participations of other Lenders (other than any other Defaulting Lenders) as if
such Defaulting Lender (and any other Defaulting Lenders) had no participations
outstanding and the Letter of Credit Exposure of such Defaulting Lender were
zero, (iii) except to the extent that the immediately preceding clause (ii)
applies, during any Default Period with respect to such Defaulting Lender any
payment or reimbursement of amounts funded by such Defaulting Lender with
respect to a drawing under a Letter of Credit shall be applied first, to cash
collateralize, to the full extent thereof, the maximum amount of the Letter of
Credit Commitment of such Defaulting Lender pursuant to documentation and
arrangements reasonably satisfactory to Administrative Agent and Issuing
Lenders, second, to reimburse fees and expenses of the type described in the
last sentence of subsection 10.1H in connection with such cash
collateralization, and third, to reimburse amounts funded by such Defaulting
Lender with respect to its participations in Letters of Credit, and (iv) such
Defaulting Lender's Letter of Credit Commitment and Pro Rata Share with respect
thereto shall be excluded for purposes of calculating the letter of credit fees
under subsection 3.2 in respect of any day during any Default Period with
respect to such Defaulting Lender, and such Defaulting Lender shall not be
entitled to receive any such letter of credit fee with respect to such
Defaulting Lender's Letter of Credit Commitments in respect of any Default
Period with respect to such Defaulting Lender.
For purposes of this Agreement, (I) "DEFAULT PERIOD" means (i)
with respect to any default in any Defaulting Lender's obligations under
subsection 10.1H, the period commencing on the date of the applicable default in
such obligations and ending on the earliest
46
of the following dates: (A) the date on which all Letter of Credit Commitments
and participations are cancelled or terminated and/or the Obligations are paid
in full and all Letters of Credit have been returned to the Issuing Lenders
cancelled, (B) the date on which such Defaulting Lender shall have complied with
its obligations under subsection 10.1H, and (C) the date on which Administrative
Agent and all Issuing Lenders waive all such defaults of such Defaulting Lender
in writing; and (ii) with respect to any Funding Default of any Defaulting
Lender, the period commencing on the date of the applicable Funding Default and
ending on the earliest of the following dates: (A) the date on which all Letter
of Credit Commitments and participations are cancelled or terminated and/or the
Obligations are paid in full and all Letters of Credit have been returned to the
Issuing Lenders cancelled, (B) the date on which (1) the Default Excess with
respect to such Defaulting Lender shall have been reduced to zero (whether by
the funding by such Defaulting Lender of any Defaulted Participations of such
Defaulting Lender or by the non-pro rata application of any payments of amounts
with respect to any payments or reimbursements of amounts with respect to
drawings under Letters of Credit in accordance with the terms hereof or any
combination thereof), and (2) such Defaulting Lender shall have delivered to
Company and Agents a written reaffirmation of its intention to honor its
obligations under this Agreement with respect to its Letter of Credit
Commitments, and (C) the date on which Company, Administrative Agent and all
Issuing Lenders waive all Funding Defaults of such Defaulting Lender in writing,
and (II) "DEFAULT EXCESS" means, with respect to any Defaulting Lender, the
excess, if any, of (x) such Defaulting Lender's applicable Pro Rata Share of all
funded participations in Letters of Credit (calculated as if all Defaulting
Lenders (other than such Defaulting Lender) had funded all of their respective
Defaulted Participations) over (y) the aggregate funded amount of such
Defaulting Lender's participations in Letters of Credit.
No Commitment of any Lender shall be increased or otherwise
affected, and, except as otherwise expressly provided in this subsection 2.6,
performance by any Borrower of its obligations under this Agreement and the
other Credit Documents shall not be excused or otherwise modified, as a result
of any Funding Default or the operation of this subsection 2.6. The rights and
remedies against a Defaulting Lender under this subsection 2.6 are in addition
to other rights and remedies that Borrowers may have against such Defaulting
Lender with respect to any Funding Default and that Agents, any Issuing Lender
or any Lender may have against such Defaulting Lender with respect to any
Funding Default.
2.7 JOINT AND SEVERAL LIABILITY; PAYMENT INDEMNIFICATIONS.
A. JOINT AND SEVERAL OBLIGATIONS. All Obligations of
Borrowers under the Credit Documents shall be the joint and several Obligations
of each Borrower.
B. NO IMPAIRMENT OR RELEASE. The Obligations of and the
Liens granted by any Borrower under the Credit Documents shall not be impaired
or released by any action or inaction on the part of Administrative Agent or any
Lender with respect to any other Credit Party, including any action or inaction
which would otherwise release a surety.
C. CONTRIBUTION RIGHTS. In order to provide for just and
equitable contribution among Borrowers if any payment is made by a Borrower (a
"FUNDING BORROWER") in discharging any of the Obligations, that Funding Borrower
shall be entitled to a contribution from the other Borrowers for all payments,
damages and expenses incurred by that Funding
47
Borrower in discharging the Obligations, in the manner and to the extent
required to allocate liabilities in an equitable manner among Borrowers on the
basis of the relative benefits received by Borrowers. If and to the extent that
a Funding Borrower makes any payment to any Lender or any other Person in
respect of the Obligations, any claim which said Funding Borrower may have
against the other Borrowers by reason thereof shall be subject and subordinate
to the prior cash payment in full of the Obligations. The parties hereto
acknowledge that the right to contribution hereunder shall constitute an asset
of the party to which such contribution is owing and shall be subject to the
Liens and security interests of the Administrative Agent. Notwithstanding any of
the foregoing to the contrary, such contribution arrangements shall not limit in
any manner the joint and several nature of the Obligations, limit, release or
otherwise impair any rights of Administrative Agent or any Lender under the
Credit Documents, or alter, limit or impair the obligation of each Borrower,
which is absolute and unconditional, to repay the Obligations.
2.8 RIGHTS OF SUBROGATION, CONTRIBUTION, ETC.
Except as prohibited under applicable law, Company hereby
waives any claim, right or remedy, direct or indirect, that Company now has or
may hereafter have against any other Borrower or any guarantor of the
Obligations in connection with this Agreement or the performance by Company of
its obligations hereunder, in each case whether such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise and
including (a) any right of subrogation, reimbursement or indemnification that
Company now has or may hereafter have against any other Borrower or guarantor of
the Obligations, (b) any right to enforce, or to participate in, any claim,
right or remedy that any Agent or Lender now has or may hereafter have against
any other Borrower or guarantor of the Obligations, and (c) any benefit of, and
any right to participate in, any collateral or security now or hereafter held by
any Agent or Lender. In addition, until the Obligations shall have been
indefeasibly paid in full and the Letter of Credit Commitments shall have
terminated and all Letters of Credit shall have expired or been cancelled,
Company shall withhold exercise of any right of contribution Company may have
against any other Borrower or Credit Party. Company further agrees that, to the
extent the waiver or agreement to withhold the exercise of its rights of
subrogation, reimbursement, indemnification and contribution as set forth herein
is found by a court of competent jurisdiction to be void or voidable for any
reason, any rights of subrogation, reimbursement or indemnification Company may
have against any other Borrower or Credit Party or against any collateral or
security shall be junior and subordinate to any rights any Agent or Lender may
have against any other Borrower, to all right, title and interest any Agent or
Lender may have in any such collateral or security, and to any right any Agent
or Lender may have against such Credit Party. If any amount shall be paid to
Company on account of any such subrogation, reimbursement, indemnification or
contribution rights at any time when all Obligations shall not have been paid in
full, such amount shall be held in trust for Administrative Agent on behalf of
Agents and Lenders and shall forthwith be paid over to Administrative Agent for
the benefit of Agents and Lenders to be credited and applied against the
Obligations, whether matured or unmatured, in accordance with the terms hereof.
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SECTION 3. LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF
PARTICIPATIONS THEREIN.
A. INITIAL ISSUANCE. In the event that UBS Bank executes
and delivers a counterpart of this Agreement as Issuing Lender on or prior to
the Closing Date, UBS Bank shall, on the Closing Date upon receiving evidence
satisfactory to it that the Existing Detroit L/Cs are concurrently therewith
being returned undrawn and cancelled, issue a Letter of Credit or Letters of
Credit in substantially the form attached hereto as Exhibit IV to replace the
Existing Detroit L/Cs. In the event that UBS Bank does not execute and deliver a
counterpart of this Agreement as Issuing Lender on or prior to the Closing Date,
Bank of America shall, on the Closing Date upon receiving evidence satisfactory
to it that the Existing Detroit L/Cs are concurrently therewith being returned
undrawn and cancelled, issue a Letter of Credit or Letters of Credit in
substantially the form attached hereto as Exhibit IV to replace the Existing
Detroit L/Cs.
B. MECHANICS OF ADDITIONAL ISSUANCES.
(i) Request for Issuance of Letters of Credit. After the
issuance of any Letter of Credit on the Closing Date pursuant to
subsection 3.1A, whenever Borrowers desire to have the Issuing Lender
issue a Letter of Credit to extend or replace such outstanding Letter
of Credit, or Agents request (with a copy of such request to Company)
that the Issuing Lender issue a Letter of Credit to extend or to
replace such outstanding Letter of Credit, Borrowers shall deliver to
Administrative Agent a Request for Issuance no later than 12:00 Noon
(New York City time) at least 10 Business Days (or in each case such
shorter period as may be agreed to by Administrative Agent in any
particular instance) in advance of the proposed date of issuance, which
Request for Issuance shall describe the relevant Letter of Credit and
the verbatim text of the Letter of Credit proposed to be issued or of
such extension, as the case may be, and shall specify such proposed
date of issuance or extension; provided, that Borrowers shall not
request that Issuing Lender issue or extend (and Issuing Lender shall
not issue or extend) any Letter of Credit:
(a) if the underlying Contractual Obligation to
provide any such Letter of Credit or a replacement thereto to
the beneficiary thereof has terminated, and/or the beneficiary
of such Letter of Credit has otherwise returned the same for
cancellation without the expectation that a Letter of Credit
will be issued contemporaneously with such cancellation in
substitution therefor;
(b) unless the terms of such Letter of Credit as
so replaced or extended (other than the stated amount and
expiration date thereof) are substantially identical to the
terms of the corresponding Letter of Credit being replaced or
extended;
(c) unless the stated amount of such Letter of
Credit as so replaced or extended is identical to the stated
amount of the corresponding Letter of Credit being replaced or
extended, as the case may be, in effect at the time of such
49
extension (and the formula in effect on the Closing Date for
calculating required reductions in the stated amount of any
Letter of Credit shall apply to such Letter of Credit as so
replaced or extended), and is denominated in Dollars;
(d) if such Letter of Credit as so replaced or
extended has an expiration date later than the earlier of (y)
the 5th Business Day prior to the Maturity Date and (z) the
date which is three years from the date of issuance of such
Letter of Credit; or
(e) if, after giving effect to such issuance or
extension, the Letter of Credit Usage would exceed the Letter
of Credit Commitments.
(ii) Recertification. Borrowers shall notify the Issuing
Lender (and Administrative Agent, if Administrative Agent is not such
Issuing Lender) prior to the issuance or extension of any Letter of
Credit in the event that any of the matters to which Borrowers are
required to certify in the relevant Request for Issuance is no longer
true and correct as of the proposed date of issuance or extension of
such Letter of Credit (provided that no Request for Issuance shall
require Borrowers to make representations or warranties other than
those referenced in subsection 3.1B(iii)(b)), and upon the issuance or
extension of such Letter of Credit Borrowers shall be deemed to have
re-certified, as of the date of such issuance or extension, as to the
matters to which Borrowers are required to certify in such Request for
Issuance (except to the extent such requirement to re-certify as to
such matters shall have been waived in accordance with subsection 10.6
hereof).
(iii) Issuance of Letter of Credit. Subject to subsections
3.1B(i) and 3.1B(ii), unless the Maturity Date shall have occurred,
upon satisfaction or waiver (in accordance with subsection 10.6) of the
following conditions on the date of issuance or extension, the
applicable Issuing Lender shall issue the requested Letter of Credit
(in the form set forth in such notice) to replace (or shall extend, as
the case may be) the relevant outstanding Letter of Credit, in
accordance with such Issuing Lender's standard operating procedures:
(a) On or before the date of issuance or
extension of such Letter of Credit, Administrative Agent shall
have received, in accordance with the provisions of subsection
3.1B(i), an originally executed Request for Issuance (or a
facsimile copy thereof), signed by a duly authorized Officer
of Borrowers, together with all other information specified in
subsection 3.1B(i) and such other documents or information as
Issuing Lender may reasonably require in connection with the
issuance or extension of such Letter of Credit;
(b) The representations and warranties contained
in subsections 5.1, 5.2, 5.15, 5.16 and 5.18 shall be true,
correct and complete in all material respects on and as of the
date of issuance or extension of such Letter of Credit 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 such representations
and warranties shall have been true, correct and complete in
all material respects on and as of such earlier date; and
50
(c) No event shall have occurred and be
continuing or would result from the issuance or extension of
such Letter of Credit that would constitute an Event of
Default or a Potential Event of Default.
(iv) Notification to Lenders. No later than 10 Business
Days prior to the decision to extend or reissue any Letter of Credit,
the Issuing Lender thereof shall notify Agents in writing of the date
on which such Issuing Lender expects such decision will be made and of
the date by which such decision must be made in order to avoid a
drawing under such Letter of Credit. Promptly after the issuance,
amendment or extension of any Letter of Credit the applicable Issuing
Lender shall promptly notify Administrative Agent and each Lender of
such issuance, amendment or extension in writing. Upon receipt of such
notice (or, if Administrative Agent is the Issuing Lender, together
with such notice), Administrative Agent shall notify each Lender in
writing of the amount of such Lender's respective participation in such
Letter of Credit, determined in accordance with subsection 3.1C and, if
so requested by a Lender, Administrative Agent shall provide such
Lender with a copy of such Letter of Credit, amendment or extension.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF
CREDIT. Immediately upon the issuance of any Letter of Credit (including any
issuance of a Letter of Credit pursuant to subsection 3.1A), each Lender shall
be deemed to, and hereby agrees to, have irrevocably purchased from the Issuing
Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Lender's Pro Rata Share of the maximum
amount which is or at any time may become available to be drawn thereunder. Each
Borrower, with respect to the Existing Detroit L/Cs and the Letters of Credit,
hereby (1) represents, warrants, agrees, covenants and reaffirms that it has no
(and it permanently and irrevocably waives and releases Agents and Lenders from
any, to the extent arising on or prior to the Closing Date with respect to the
Existing Detroit L/Cs) defense, set off, claim or counterclaim against Agents or
any Lender in regard to its obligations in respect of any such participation in
a Letter of Credit or any drawings honored thereunder, and (2) affirms its
obligation to pay such participations, and any amounts owed (whether or not then
due and payable, and including all interest and fees accrued under the DIP
Credit Documents to the Closing Date with respect to the Existing Detroit L/Cs)
with respect to each Letter of Credit in accordance with the terms and
conditions of this Agreement and the other Credit Documents.
3.2 LETTER OF CREDIT FEES.
Borrowers jointly and severally agree to pay the following
amounts with respect to each Letter of Credit:
(i) a fronting fee, payable directly to the applicable
Issuing Lender for its own account, equal to (a) the greater of (X)
$500 and (Y) 0.25% per annum of the daily amount available to be drawn
under such Letter of Credit, plus (b) an annual fee of $1,500, and
(ii) a letter of credit fee, payable to Administrative
Agent for the account of Lenders, equal to 2.50% per annum (expressed
as a daily rate) multiplied by the daily amount available to be drawn
under such Letter of Credit,
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each such fronting fee and letter of credit fee to be payable in arrears on and
to (but excluding) the last day of each month and computed on the basis of a
360-day year, for the actual number of days elapsed, except that the annual fee
referred to in clause (i)(b) shall be payable in advance on the date of issuance
of such Letter of Credit and on each anniversary thereof; and with respect to
the issuance, amendment or transfer of each Letter of Credit and each payment of
a drawing made thereunder (without duplication of the fees payable under clauses
(i) and (ii) above), Borrowers jointly and severally agree to pay documentary
and processing charges payable directly to the applicable Issuing Lender for its
own account in accordance with such Issuing Lender's standard schedule for such
charges in effect at the time of such issuance, amendment, transfer or payment,
as the case may be.
For purposes of calculating any fees payable under this
subsection 3.2, the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination. Promptly upon receipt by Administrative Agent of any amount
described in clause (ii) of this subsection 3.2 with respect to a Letter of
Credit, Administrative Agent shall distribute to each Lender its Pro Rata Share
of such amount. All fees referenced in this subsection 3.2 shall be earned when
payable and shall be non-refundable. Upon the occurrence and during the
continuation of any Event of Default, all fees set forth in this subsection 3.2
shall accrue at a rate that is 2.00% per annum in excess of the rate otherwise
set forth in this subsection and shall, if Requisite Lenders so request, be
payable upon demand. Payment or acceptance of the increased rates provided for
in this paragraph shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Administrative Agent or
any Lender.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF
CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO
DRAWINGS. In determining whether to honor any drawing under any Letter of Credit
by the beneficiary thereof, the Issuing Lender shall be responsible only to
examine the documents delivered under such Letter of Credit with reasonable care
so as to ascertain whether they appear on their face to be in compliance with
the terms and conditions of such Letter of Credit.
B. REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF
CREDIT. In the event an Issuing Lender has determined to honor a drawing under a
Letter of Credit issued by it, such Issuing Lender shall immediately notify
Borrowers and Borrowers shall reimburse such Issuing Lender on or before the
Business Day immediately following the date on which such drawing is honored
(the "REIMBURSEMENT DATE") in an amount in Dollars and in same day funds equal
to the amount of such payment.
C. PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER
LETTERS OF CREDIT.
(i) Payment by Lenders. In the event that Borrowers shall
fail for any reason to reimburse any Issuing Lender as provided in
subsection 3.3B in an amount equal to the amount of any payment by such
Issuing Lender under a Letter of Credit issued by it, such Issuing
Lender shall promptly notify Administrative Agent of the unreimbursed
amount of such drawing and upon receipt of such notice, Administrative
Agent shall promptly
52
notify each Lender (other than such Issuing Lender) of such
unreimbursed amount and of such Lender's respective participation
therein based on such Lender's Pro Rata Share; provided that no
Lender's funding of its participation in any such drawing shall exceed
its Pro Rata Share of the amount of such drawing, and the aggregate
principal amount of all participations funded by a Lender with respect
to Letters of Credit shall in no event exceed the amount of such
Lender's Letter of Credit Commitment. Each Lender shall make available
to such Issuing Lender an amount equal to its respective participation,
in Dollars and in same day funds, at the office of such Issuing Lender
specified in such notice, not later than 12:00 Noon (New York City
time) on the first Business Day (under the laws of the jurisdiction in
which such office of such Issuing Lender is located) after the date
notified by Administrative Agent. In the event that any Lender fails to
make available to such Issuing Lender on such Business Day the amount
of such Lender's participation in such Letter of Credit as provided in
this subsection 3.3C, such Issuing Lender shall be entitled to recover
such amount on demand from such Lender together with interest thereon
at the rate customarily used by such Issuing Lender for the correction
of errors among banks for three Business Days and thereafter at the
Base Rate. Nothing in this subsection 3.3C shall be deemed to prejudice
the right of any Lender to recover from any Issuing Lender any amounts
made available by such Lender to such Issuing Lender pursuant to this
subsection 3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment with
respect to a Letter of Credit by such Issuing Lender in respect of
which payment was made by such Lender constituted gross negligence or
willful misconduct on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received
From Borrowers. In the event any Issuing Lender shall have been
reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or
any portion of any payment by such Issuing Lender under a Letter of
Credit issued by it, such Issuing Lender shall deliver to
Administrative Agent for distribution to any other Lender that has paid
all amounts payable by it under subsection 3.3C(i) with respect to such
payment such other Lender's Pro Rata Share of all payments subsequently
received by such Issuing Lender from Borrowers in reimbursement of such
payment under the Letter of Credit when such payments are received. Any
such distribution shall be made to a Lender at its primary address set
forth below its name on the appropriate signature page hereof or at
such other address as such Lender may request.
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Borrowers. Borrowers agree to
pay to each Issuing Lender, with respect to payments under any Letters
of Credit issued by it, interest on the amount paid by such Issuing
Lender in respect of each such payment from the date a drawing is
honored to but excluding the date such amount is reimbursed by
Borrowers at a rate equal to (1) for the period from the date such
drawing is honored to but excluding the Reimbursement Date, the Base
Rate plus 3.00% per annum and (2) thereafter, a rate which is 2% per
annum in excess of the rate of interest set forth in the foregoing
clause (i)(1). Interest payable pursuant to this subsection 3.3D(i)
shall be computed on the basis of a 365-day or 366-day year, as the
case may be, for the actual number of days
53
elapsed in the period during which it accrues and shall be payable on
demand or, if no demand is made, on the date on which the related
drawing under a Letter of Credit is reimbursed in full. All payments by
Borrowers in respect of payments made by an Issuing Lender under a
Letter of Credit issued by it shall include payment of accrued interest
on the principal amount being repaid or prepaid, and all such payments
shall be applied to the payment of interest before application to
principal. Payment or acceptance of the increased rates of interest
provided for in this subsection 3.3D is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent or any Lender.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a payment under a Letter
of Credit issued by it, (a) such Issuing Lender shall distribute to
Administrative Agent for distribution to each other Lender, out of the
interest received by such Issuing Lender in respect of the period from
the date such drawing is honored to but excluding the date on which
such Issuing Lender is reimbursed for the amount of such payment, the
amount that such other Lender would have been entitled to receive in
respect of the letter of credit fee that would have been payable in
respect of such Letter of Credit for such period pursuant to subsection
3.2 if no drawing had been honored under such Letter of Credit, and (b)
in the event such Issuing Lender shall have been reimbursed by other
Lenders pursuant to subsection 3.3C(i) for all or any portion of such
payment, such Issuing Lender shall distribute to Administrative Agent
for distribution to each other Lender that has paid all amounts payable
by it under subsection 3.3C(i) with respect to such payment such other
Lender's Pro Rata Share of any interest received by such Issuing Lender
in respect of that portion of such payment so reimbursed by other
Lenders for the period from the date on which such Issuing Lender was
so reimbursed by other Lenders to but excluding the date on which such
portion of such payment is reimbursed by Borrowers. Any such
distribution shall be made to a Lender at its primary address set forth
below its name on the appropriate signature page hereof or at such
other address as such Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Borrowers to reimburse each Issuing Lender
for payments under the Letters of Credit issued by it and the obligations of
Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter
of Credit;
(ii) the existence of any claim, set-off, defense or other
right which any Borrower or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), any Issuing Lender or
other Lender or any other Person or, in the case of a Lender, against
any Borrower, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction
(including any underlying transaction between any
54
Borrower or one of its Subsidiaries and the beneficiary for which any
Letter of Credit was procured);
(iii) any draft or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by the applicable Issuing Lender under any
Letter of Credit against presentation of a draft or other document
which does not substantially comply with the terms of such Letter of
Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries (including CPIH Subsidiaries);
(vi) any breach of this Agreement or any other Credit
Document by any party thereto;
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential
Event of Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 NATURE OF ISSUING LENDERS' DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as
provided in subsection 2.4, Borrowers hereby jointly and severally agree to
protect, indemnify, pay and save harmless each Issuing Lender from and against
any and all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable fees, expenses and disbursements of outside
counsel and allocated costs of internal counsel) which such Issuing Lender may
incur or be subject to as a consequence, direct or indirect, of (i) the issuance
of any Letter of Credit by such Issuing Lender, other than as a result of (a)
the gross negligence or willful misconduct of such Issuing Lender as determined
by a final judgment of a court of competent jurisdiction or (b) subject to the
following clause (ii), the wrongful dishonor by such Issuing Lender of a proper
demand for payment made under any Letter of Credit issued by it or (ii) the
failure of such Issuing Lender to honor a drawing under any such Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto Government Authority.
B. NATURE OF ISSUING LENDERS' DUTIES. As between
Borrowers and any Issuing Lender, Borrowers assume all risks of the acts and
omissions of, or misuse of the Letters of Credit issued by such Issuing Lender
by, the respective beneficiaries of such Letters of Credit.
55
In furtherance and not in limitation of the foregoing, such Issuing Lender shall
not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any such Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) failure of the beneficiary of any such Letter of Credit to comply
fully with any conditions required in order to draw upon such Letter of Credit;
(iv) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including any act or
omission by a Government Authority specified in subsection 3.5A, and none of the
above shall affect or impair, or prevent the vesting of, any of such Issuing
Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this subsection 3.5B,
any action taken or omitted by any Issuing Lender under or in connection with
the Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put such Issuing Lender
under any resulting liability to any Borrower.
Notwithstanding anything to the contrary contained in this
subsection 3.5, Borrowers shall retain any and all rights they may have against
any Issuing Lender for any liability arising solely out of the gross negligence
or willful misconduct of such Issuing Lender, as determined by a final judgment
of a court of competent jurisdiction.
3.6 CASH COLLATERAL FOR LETTERS OF CREDIT.
A. RELEASES OF CASH COLLATERAL. If (i) (a) the
underlying Contractual Obligation to provide a Letter of Credit or a replacement
thereto to the beneficiary thereof has terminated (other than by drawing under
such Letter of Credit), and/or (b) the beneficiary of such Letter of Credit has
otherwise returned the same for cancellation without the expectation that a
Letter of Credit will be issued contemporaneously with such cancellation in
substitution for such cancelled Letter of Credit, and/or the maximum amount
available for drawing under a Letter of Credit is permanently reduced (other
than such a reduction concurrently with a reissuance or replacement of the
relevant reduced portion of such Letter of Credit pursuant to subsection
3.1B(iii)), and (ii) the Letter of Credit Commitments are permanently reduced by
the amount of such Letter of Credit or such reduction in the stated amount of
such Letter of Credit, as the case may be, then, to the extent that the amount
of cash collateral securing the Letter of Credit Exposure pursuant to the
Collateral Account Agreement exceeds 105% of the Letter of Credit Commitments
then in effect after such permanent reduction, the excess cash collateral shall
be applied to the payment to or upon the order of Borrowers or to whosoever may
be lawfully entitled to receive the same or as a court of competent jurisdiction
may direct, except to
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the extent the Intercreditor Agreement requires application in a different
manner than as set forth in this subsection 3.6.
B. CASH COLLATERAL ON THE MATURITY DATE. On the Maturity
Date, any outstanding Letter of Credit Exposure shall be cash collateralized in
an amount equal to 105% of the amount thereof by Borrowers or otherwise
supported, in either case in a manner satisfactory to the Lenders.
SECTION 4. CONDITIONS TO CLOSING DATE
The initial issuance of Letters of Credit hereunder is subject
to the satisfaction of the following conditions.
4.1 CONDITIONS TO CLOSING DATE.
The obligations of Lenders with respect to their respective
Letter of Credit Commitments, and the issuance of any Letters of Credit to be
issued on the Closing Date, are subject to prior or concurrent satisfaction of
the following conditions:
A. CREDIT PARTY DOCUMENTS. On or before the Closing
Date, Borrowers shall, and shall cause each other Credit Party to, deliver to
Lenders (or to Administrative Agent with sufficient originally executed copies,
where appropriate, for each Lender) the following with respect to Borrowers or
such Credit Party, as the case may be, each, unless otherwise noted, dated the
Closing Date:
(i) Copies of the Organizational Documents of such
Person, certified by the Secretary of State of its jurisdiction of
organization or, if such document is of a type that may not be so
certified, certified by the secretary or similar officer of the
applicable Credit Party, together with a good standing certificate from
the Secretary of State of its jurisdiction of organization and each
other state in which such Person is qualified to do business and, to
the extent generally available, a certificate or other evidence of good
standing as to payment of any applicable franchise or similar taxes
from the appropriate taxing authority of each of such jurisdictions,
each dated a recent date prior to the Closing Date;
(ii) Resolutions of the Governing Body of such Person
approving and authorizing the execution, delivery and performance of
the Credit Documents to which it is a party certified as of the Closing
Date by the secretary or similar officer of such Person as being in
full force and effect without modification or amendment;
(iii) Signature and incumbency certificates of the officers
of such Person executing the Credit Documents to which it is a party;
(iv) Executed originals of the Credit Documents to which
such Person is a party; and
(v) Such other documents as Administrative Agent may
reasonably request.
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B. FEES. Borrowers shall have paid out of Debtors'
estates to Administrative Agent, (i) for distribution (as appropriate) to Agents
and Lenders, the fees payable on the Closing Date referred to in subsection 2.2
and all reasonable and documented costs and expenses (including legal fees, due
diligence fees, recordation expenses, other out-of-pocket expenses and taxes) of
Agents incurred in connection with the negotiation, preparation, recordation,
execution and completion of the Credit Documents and the transactions
contemplated thereby, including such fees and expenses of O'Melveny & Xxxxx LLP,
counsel to Agents, and Ernst & Young Corporate Finance LLC, and (ii) for
distribution (as appropriate) to DIP Lenders and DIP Agents, all unpaid interest
and fees accrued under the DIP Credit Agreement on or before the Closing Date,
and all reasonable and documented costs and expenses of Agents and Lenders owed
pursuant to subsection 10.2 of the DIP Credit Agreement. Borrowers shall have
paid out of Debtors' estates to Xxxxxxx Xxxxx Xxxxxx Xxxxxx & Xxxxx Incorporated
the underwriting fee of $1,381,915.54 required pursuant to the "Commitment
Letter" (as defined in the Order Pursuant to Section 363 of the Bankruptcy Code
Authorizing Debtors to Enter into Letter Agreement with Xxxxxxx Xxxxx Xxxxxx
Xxxxxx & Xxxxx Incorporated, on Behalf of X.X. Xxxx Laminar Portfolios, L.L.C.
and Quantum Partners LDC, in Connection with Exit Financing and Make Certain
Payments in Connection Therewith entered by the Bankruptcy Court on February 27,
2004).
C. CORPORATE AND CAPITAL STRUCTURE; MANAGEMENT;
OWNERSHIP.
(i) Corporate Structure. DHC shall own all of the issued
and outstanding Capital Stock of Company. The corporate organizational
structure of Company and its Subsidiaries (including CPIH Subsidiaries)
on the Closing Date, after giving effect to the Plan of Reorganization,
shall be satisfactory to Requisite Lenders, shall be consistent in all
material respects with the Plan of Reorganization and the Disclosure
Statement related thereto.
(ii) Capital Structure and Ownership. DHC shall have made
a cash equity contribution to Company of not less than $30,000,000
(including cash equity contributed in connection with the "Lake
Transaction" (as defined in the DIP Credit Agreement). The capital
structure and ownership of Company and its Subsidiaries (including CPIH
Subsidiaries) on the Closing Date, after giving effect to the Plan of
Reorganization, shall be satisfactory to Requisite Lenders, shall be
consistent in all material respects with the Plan of Reorganization and
the Disclosure Statement related thereto.
(iii) Management. The Governing Bodies, officers and
management structure of Company and its Subsidiaries (including CPIH
Subsidiaries) on the Closing Date, after giving effect to the Plan of
Reorganization, shall be satisfactory to Requisite Lenders, shall be
consistent in all material respects with the Plan of Reorganization and
the Disclosure Statement related thereto and shall be as set forth on
Schedule 4.1C annexed hereto. Lenders shall have received copies of,
and Requisite Lenders shall be satisfied with the form and substance of
any employment agreements with and any incentive arrangements for
senior management of Company and its Subsidiaries.
D. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
AGREEMENTS. Company shall have delivered to Agents an Officer's Certificate, in
form and substance satisfactory to Agents, to the effect that the
representations and warranties in Section 5 are true,
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correct and complete in all material respects on and as of the Closing Date to
the same extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete in all material
respects on and as of such earlier date) and that Borrowers shall have performed
in all material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before the
Closing Date.
E. PLAN OF REORGANIZATION; CONFIRMATION ORDER; DISCHARGE
OF EXISTING CREDIT FACILITIES.
(i) Plan of Reorganization. The Plan of Reorganization
and all amendments, modifications, revisions and restatements thereof,
if any, shall have been approved by the creditors of Borrowers
(including the DIP Lenders and the Prepetition Lenders) in requisite
number and percentage and confirmed by the Bankruptcy Court pursuant to
the Confirmation Order and delivered to Agents (the "APPROVED PLAN OF
REORGANIZATION"). Except as set forth in modifications filed with the
Bankruptcy Court and approved by Agents, there shall have been no
modifications, amendments, revisions or restatements of the Approved
Plan of Reorganization. Any representation and warranty made by Company
or any of its Subsidiaries in the Approved Plan of Reorganization shall
be accurate, true, correct and complete in all material respects as of
the Closing Date. The Approved Plan of Reorganization (a) shall provide
for the payments on the Closing Date described in subsection 4.1T, the
corporate reorganization described in subsection 4.1S, and the issuance
of the Letters of Credit under this Agreement and the Indebtedness
described in subsection 4.1F; and (b) upon satisfaction of all
conditions to the effectiveness of this Agreement, shall become
effective in accordance with its terms without waiver of any condition
to such effectiveness that, in Agents' reasonable judgment, is
material.
(ii) Confirmation Order. The Confirmation Order shall have
been delivered to Lenders, shall address the matters set forth in
subsections 4.1F, 4.1S and 4.1T, the issuance of the Letters of Credit
under this Agreement and the terms hereof and the granting of all Liens
and consents required under this Agreement and the other Credit
Documents and otherwise be in form and substance satisfactory to
Requisite Lenders. The Confirmation Order shall be in full force and
effect and no portion thereof shall have been stayed pending any appeal
or petition for review or for rehearing, and Agents shall have received
evidence satisfactory to each demonstrating such facts. Debtors' Second
Joint Plan of Liquidation under Chapter 11 of the Bankruptcy Code and
the Liquidation Plan Supplement to Debtors' Second Joint Plan of
Liquidation, as filed with the Bankruptcy Court on December 18, 2003
and February 18, 2004, respectively, and as amended, supplemented or
otherwise modified from time to time thereafter to the extent permitted
under the DIP Credit Agreement, shall have been confirmed by the
Bankruptcy Court pursuant to an order in form and substance
satisfactory to Requisite Lenders.
(iii) Approval of Fees Related to Exit Financing. The
Bankruptcy Court order approving the fees payable to Agents and the
Lenders described in subsection 4.1B shall be in full force and effect,
without modification or amendment except to the extent approved by
Agents.
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(iv) Material Agreements. The terms and conditions of any
Material Contracts to be entered into by the Borrowers or any of their
Subsidiaries pursuant to the Approved Plan of Reorganization shall be
in form and substance satisfactory to Requisite Lenders and Agents.
F. MATTERS RELATING TO EXISTING INDEBTEDNESS.
(i) Termination of DIP Credit Agreement and Related
Liens. (a) Indebtedness consisting of funded amounts outstanding under
the DIP Credit Agreement on the Closing Date shall have been repaid in
full in cash, (b) all undrawn DIP Tranche A L/Cs and DIP Tranche X X/Cs
(other than the Existing Detroit L/Cs) shall be replaced (or any
further drawings thereunder shall be fully supported pursuant to
arrangements satisfactory to DIP Lenders and the issuers thereof) with
letters of credit issued under the New L/C Facility Agreement, (c) the
Existing Detroit L/Cs shall be replaced with Letters of Credit, (d)
each letter of credit (if any) issued or deemed issued under the DIP
Credit Agreement other than the DIP Tranche A L/Cs and DIP Tranche B
L/Cs shall have been cash collateralized pursuant to arrangements
reasonably satisfactory to the issuer of such letter of credit, or
cancelled and returned undrawn, or reimbursed, (e) all commitments to
lend or make other extensions of credit under the DIP Credit Agreement
shall have terminated (except that the participations of DIP Lenders
purchased in the letters of credit, if any, referred to in clause (d)
above shall continue), and (f) all documents or instruments necessary
to release all Liens securing Indebtedness or other obligations of
Borrowers and their Subsidiaries (including CPIH Subsidiaries) under
the DIP Credit Agreement shall have been delivered to Administrative
Agent to the extent required by Administrative Agent.
(ii) Termination of Prepetition Credit Agreement, 9.25%
Debentures and Related Liens. (a) Indebtedness consisting of the 9.25%
Debentures and the Prepetition Obligations on the Closing Date shall be
satisfied by application of the High Yield Notes and the CPIH Term
Loans and by application of Cash On Hand of Borrowers (as described in
subsection 4.1T), and (b) all documents or instruments necessary to
release all Liens securing Indebtedness or other obligations of
Borrowers and their Subsidiaries (including CPIH Subsidiaries) under
the Prepetition Credit Agreement and the 9.25% Debentures shall have
been delivered to Administrative Agent to the extent required by the
Administrative Agent.
(iii) CPIH Facilities. Indebtedness under the CPIH Revolver
Agreement and Indebtedness under the CPIH Term Loan Agreement shall be
secured as set forth in the CPIH Revolver Documents and the CPIH Term
Loan Documents and shall be non-recourse to the Borrowers or their
assets other than pursuant to the CPIH Stock Pledge Agreement. The CPIH
Revolver Documents and the CPIH Term Loan Documents shall be in full
force and effect, the "Closing Date" as defined in each of the CPIH
Revolver Documents and the CPIH Term Loan Documents shall have
occurred, and the CPIH Revolver Documents and the CPIH Term Loan
Documents shall provide for $10,000,000 in revolving loan commitments
and $90,000,000 in term loans (subject to increase to up to $95,000,000
pursuant to and in accordance with the Approved Plan of
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Reorganization), respectively, and shall otherwise be in form and
substance satisfactory to Requisite Lenders.
(iv) Existing Indebtedness to Remain Outstanding. After
giving effect to the Approved Plan of Reorganization, the Indebtedness
and Contingent Obligations of Borrowers (other than Indebtedness under
the Credit Documents) shall consist of (a) the New L/C Facility
Documents, which shall provide for maximum aggregate commitments of
$118,000,000 for the issuance of letters of credit to be issued on the
Closing Date to replace all DIP Tranche A L/Cs and DIP Tranche X X/Cs
(other than the Existing Detroit L/Cs) and for other specified uses,
shall have a final maturity date of 5 years from the Closing Date,
shall provide for fees on undrawn outstanding letters of credit at a
rate no greater than 6.5% per annum, fees on unused letter of credit
commitments at a rate no greater than .50% per annum and upfront fees
not greater than 2.00% of the entire amount of letter of credit
commitments, and shall be secured by a junior Lien on the Collateral,
(b) $205,000,000 in aggregate initial principal amount of High Yield
Notes, (c) a note issued by Company in a principal amount not to exceed
$35,000,000 (the "TAX NOTE"), representing the back tax liability of
Company and its Subsidiaries as of the Closing Date, which Tax Note
shall be unsecured and unguarantied, shall have a final maturity date
of 6 years from the Closing Date, shall bear interest payable in
arrears at a rate no greater than 7.5% per annum, and shall amortize on
a 30-year schedule for the first 5 years after the issuance thereof
with the balance due at maturity, (d) "Class 6 Unsecured Notes" (as
defined in the Approved Plan of Reorganization) in the aggregate
principal amount of $4,000,000 and subordinated notes issued by Company
(the "UNSECURED CREDITOR NOTES") in an aggregate principal amount equal
to the amount of "Operating Company Unsecured Claims" that are
"Allowed" (as such terms are defined in the Approved Plan of
Reorganization), which Unsecured Creditor Notes shall be unsecured and
unguarantied, shall have a final maturity date of 8 years from the
Closing Date, shall bear interest payable in arrears at a rate no
greater than 7.5% per annum, and shall amortize in an amount not to
exceed $3,900,000 annually commencing on the second anniversary of the
Closing Date with the remainder due at final maturity, (e) outstanding
Indebtedness described in Schedule 7.1(vi) and Schedule 7.1(ix) annexed
hereto, and (f) Indebtedness and Contingent Obligations under the CPIH
Stock Pledge Agreement, and outstanding Contingent Obligations
described in Schedule 7.4(iv) and Schedule 7.4(vi) annexed hereto. The
terms and conditions of all such Indebtedness and Contingent
Obligations (including payment terms, covenants, representations and
warranties, defaults and, in the case of the Unsecured Notes, payment
subordination provisions), and the definitive documentation therefor,
shall be in form and in substance satisfactory to Requisite Lenders.
(v) Related Agreements in Full Force and Effect. Lenders
shall have received a fully executed or conformed copy of the New L/C
Facility Documents, the CPIH Revolver Documents, the CPIH Term Loan
Documents, the CPIH Stock Pledge Agreement, the High Yield Indenture
and the High Yield Notes, the Tax Note, the Unsecured Creditor Notes,
the Unsecured Creditor Notes Indenture, the Intercreditor Agreement and
any documents executed in connection therewith, each such Related
Agreement, the Unsecured Creditor Notes, the CPIH Term Loan Documents,
the CPIH Revolver Documents, the Intercreditor Agreement and the
Unsecured Creditor Notes
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Indenture shall be in full force and effect and no provision thereof
shall have been modified or waived in any respect determined by either
Agent to be material.
G. FINANCIAL STATEMENTS; PROJECTIONS. On or before the
Closing Date, Lenders shall have received the unaudited consolidated financial
statements of Company and its Subsidiaries for the Fiscal Quarters ended June
30, 2003 and September 30, 2003, all in reasonable detail and certified by the
chief executive officer or chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company and its
Subsidiaries as of the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments. Company shall have delivered to Agents
and Lenders such projected financial statements as Agents may reasonably request
for the period from the Closing Date through December 31, 2009, including the
budget of monthly and quarterly cash receipts and expenditures for Fiscal Year
2004 and annual net cash flow for Fiscal Years 2005, 2006, 2007, 2008 and 2009
attached hereto as Schedule 1.1C, which budget and other projections shall be
satisfactory to Agents and Requisite Lenders and shall be accompanied by a
certificate from the chief executive officer or chief financial officer of
Company certifying that they are based upon good faith estimates and assumptions
believed by Company to be reasonable at the time made.
H. SOLVENCY ASSURANCES. On the Closing Date,
Administrative Agent and Lenders shall have received an Officer's Certificate
dated the Closing Date, substantially in the form of Exhibit IX annexed hereto
and with appropriate attachments, demonstrating that, after giving effect to the
consummation of the transactions contemplated by the Credit Documents,
Borrowers, taken as a whole, and Company will be Solvent.
I. OPINIONS OF COUNSEL TO CREDIT PARTIES. Lenders shall
have received originally executed copies of one or more favorable written
opinions of (a) Cleary, Gottlieb, Xxxxx & Xxxxxxxx, (b) LeBoeuf, Lamb, Xxxxxx &
XxXxx, (c) Morris, James, Hitchens & Xxxxxxxx LLP and (d) Xxxxx Peabody, LLP,
counsel for Borrowers, and of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP and
affiliates, counsel for DHC, in form and substance reasonably satisfactory to
Agents and their counsel, dated as of the Closing Date and setting forth
substantially the matters in the opinions designated in Exhibit X annexed hereto
and as to such other matters as Agents acting on behalf of Lenders may
reasonably request (this Agreement constituting a written request by Borrowers
to such counsel to deliver such opinions to Agents and Lenders).
J. OPINIONS OF COUNSEL DELIVERED UNDER RELATED
AGREEMENTS AND OTHER DOCUMENTS. Administrative Agent and its counsel shall have
received copies of the opinions of counsel delivered to the parties under the
Related Agreements, the CPIH Revolver Documents, the CPIH Term Loan Documents,
the Unsecured Creditor Notes and the Unsecured Creditor Notes Indenture, and
Borrowers shall have made reasonable efforts to obtain from each such counsel
letters authorizing Lenders to rely on such opinions to the same extent as
though such opinions were addressed to Lenders.
K. EVIDENCE OF INSURANCE. Administrative Agent shall
have received a certificate from Company's insurance broker or other evidence
satisfactory to it that all insurance required to be maintained pursuant to
subsection 6.4 is in full force and effect and that Collateral
62
Agent and/or Administrative Agent on behalf of Lenders has been named as
additional insured and/or loss payee thereunder to the extent required under
subsection 6.4.
L. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS.
Borrowers shall have obtained all Governmental Authorizations and all consents
of other Persons, in each case that are necessary or advisable in connection
with the transactions contemplated by the Credit Documents and the continued
operation of the business conducted by Company and its Subsidiaries in
substantially the same manner as conducted prior to the Closing Date. Each such
Governmental Authorization or consent shall be in full force and effect, except
in a case where the failure to obtain or maintain a Governmental Authorization
or consent, either individually or in the aggregate, should not reasonably be
expected to have a Material Adverse Effect. Administrative Agent shall have
received an Officer's Certificate of Company in form and substance reasonably
satisfactory to Administrative Agent certifying as to the foregoing matters and
any other evidence reasonably requested by Agents in support thereof. All
applicable waiting periods shall have expired without any action being taken or
threatened by any competent authority that would restrain, prevent or otherwise
impose adverse conditions on the transactions contemplated by the Credit
Documents or the financing thereof. No action, request for stay, petition for
review or rehearing, reconsideration, or appeal with respect to any of the
foregoing shall be pending, and the time for any applicable Government Authority
to take action to set aside its consent on its own motion shall have expired.
M. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. To
the extent not otherwise satisfied pursuant to subsection 4.1N, Administrative
Agent shall have received evidence satisfactory to it that Credit Parties
(except as otherwise contemplated in subsection 5.18 hereof) shall have taken or
caused to be taken all such actions, executed and delivered or caused to be
executed and delivered all such agreements, documents and instruments, and made
or caused to be made all such filings and recordings (other than the filing or
recording of items described in clauses (ii) and (iii) below) that
Administrative Agent may reasonably request in order to evidence, in favor of
Collateral Agent, for the benefit of Secured Parties, a valid and perfected
security interest in the entire personal and mixed property Collateral, with the
priority set forth in the Collateral Documents (it being understood that such
actions by DHC shall relate solely to its pledge of the Capital Stock of
Company). Such actions shall include the following:
(i) Stock Certificates and Instruments. Delivery to
Collateral Agent of (a) certificates (which certificates shall be
accompanied by irrevocable undated stock powers, duly endorsed in blank
and otherwise satisfactory in form and substance to Collateral Agent)
representing all capital stock included in the Collateral and (b) all
promissory notes or other instruments (duly endorsed, where
appropriate, in a manner satisfactory to Collateral Agent) evidencing
any Collateral;
(ii) Lien Searches and UCC Termination Statements.
Delivery to Collateral Agent of (a) the results of a recent search, by
a Person satisfactory to Collateral Agent, of all effective UCC
financing statements and fixture filings and all judgment and tax lien
filings which may have been made with respect to any personal or mixed
property of any Borrower and of all effective UCC financing statements
which may have been made with respect to Capital Stock of Borrowers or
any Subsidiary of any Borrower, in each case
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together with copies of all such filings disclosed by such search, and
(b) UCC termination statements duly executed by all applicable Persons
for filing in all applicable jurisdictions as may be necessary to
terminate any effective UCC financing statements or fixture filings
disclosed in such search (other than any such financing statements or
fixture filings in respect of Liens permitted to remain outstanding
pursuant to the terms of this Agreement);
(iii) UCC Financing Statements and Fixture Filings.
Delivery to Collateral Agent of UCC financing statements and, where
appropriate, fixture filings, duly executed by each applicable Borrower
with respect to all personal and mixed property Collateral of such
Borrower and by DHC with respect to the Capital Stock of Company, in
each case for filing in all jurisdictions as may be necessary or in the
opinion of Collateral Agent desirable to perfect the security interests
in favor of Collateral Agent created in such Collateral pursuant to the
Collateral Documents;
(iv) PTO Cover Sheets, Etc. Delivery to Collateral Agent
of all cover sheets or other documents or instruments Collateral Agent
may reasonably request to be filed with the PTO in order to evidence
Liens in favor of Collateral Agent in respect of any IP Collateral;
(v) Control Agreements. Delivery to Collateral Agent of
such Control Agreements with financial institutions and other Persons
in order to perfect Liens in respect of Deposit Accounts, Securities
Accounts and other Collateral pursuant to the Collateral Documents; and
(vi) Certificate. Delivery to Agents and Collateral Agent
of an Officer's Certificate certifying that, as of the Closing Date,
the foreign patent registrations held by Company and its Subsidiaries
are not, individually or in the aggregate, material to the business of
Company and its Subsidiaries as a whole.
N. CLOSING DATE MORTGAGES; CLOSING DATE MORTGAGE
POLICIES; ETC. Collateral Agent shall have received from each applicable
Borrower:
(i) Closing Date Mortgages. Fully executed and notarized
Mortgages (each a "CLOSING DATE MORTGAGE" and, collectively, the
"CLOSING DATE MORTGAGES"), in proper form for recording in all
appropriate places in all applicable jurisdictions, encumbering each
Real Property Asset listed in Schedule 4.1N annexed hereto (each a
"CLOSING DATE MORTGAGED PROPERTY" and, collectively, the "CLOSING DATE
MORTGAGED PROPERTIES" (it being understood and agreed that (a) no
Leasehold Property that is not a Material Leasehold Property shall be
required to be a Closing Date Mortgaged Property, and (b) no Real
Property Asset the pledge of which would constitute a material
violation of (1) a valid and enforceable Contractual Obligation in
favor of or for the benefit of a Person other than Company or any of
its Subsidiaries and their respective Affiliates for which the required
consents have not been obtained or (2) applicable law affecting the
Borrower holding such Real Property Asset, shall be required to be a
Closing Date Mortgaged Property));
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(ii) Opinions of Local Counsel. An opinion of counsel
(which counsel shall be reasonably satisfactory to Administrative
Agent) in each state in which a Closing Date Mortgaged Property is
located with respect to the enforceability of the form(s) of Closing
Date Mortgages to be recorded in such state and such other matters as
Administrative Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Administrative Agent;
(iii) Landlord Consents and Estoppels; Recorded Leasehold
Interests. In the case of each Closing Date Mortgaged Property
consisting of a Leasehold Property, (a) a Landlord Consent and Estoppel
with respect thereto, and (b) evidence that such Leasehold Property is
a Recorded Leasehold Interest;
(iv) Title Insurance. (a) ALTA mortgagee title insurance
policies or unconditional commitments therefor (the "CLOSING DATE
MORTGAGE POLICIES") issued by the Title Company with respect to the
Closing Date Mortgaged Properties listed in Part A of Schedule 4.1N
annexed hereto, in amounts not less than the respective amounts
designated therein with respect to any particular Closing Date
Mortgaged Properties, insuring fee simple title to, or a valid
leasehold interest in, each such Closing Date Mortgaged Property vested
in such Borrower and assuring Collateral Agent that the applicable
Closing Date Mortgages create valid and enforceable First Priority
mortgage Liens on the respective Closing Date Mortgaged Properties
encumbered thereby, subject only to a standard survey exception, which
Closing Date Mortgage Policies (1) shall include an endorsement for
mechanics' liens, for future advances under this Agreement and for any
other matters reasonably requested by Collateral Agent and (2) shall
provide for affirmative insurance and such reinsurance as Collateral
Agent may reasonably request, all of the foregoing in form and
substance reasonably satisfactory to Collateral Agent; and (b) evidence
satisfactory to Collateral Agent that such Borrower has (i) delivered
to the Title Company all certificates and affidavits required by the
Title Company in connection with the issuance of the Closing Date
Mortgage Policies and (ii) paid to the Title Company or to the
appropriate governmental authorities all expenses and premiums of the
Title Company in connection with the issuance of the Closing Date
Mortgage Policies and all recording and stamp taxes (including mortgage
recording and intangible taxes) payable in connection with recording
the Closing Date Mortgages in the appropriate real estate records;
(v) Title Reports. With respect to each Closing Date
Mortgaged Property listed in Part B of Schedule 4.1N annexed hereto, a
title report issued by the Title Company with respect thereto, dated
not more than 30 days prior to the Closing Date and satisfactory in
form and substance to Administrative Agent;
(vi) Copies of Documents Relating to Title Exceptions.
Copies of all recorded documents listed as exceptions to title or
otherwise referred to in the Closing Date Mortgage Policies or in the
title reports delivered pursuant to subsection 4.1N(iv); and
(vii) Matters Relating to Flood Hazard Properties. (a)
Evidence, which may be in the form of a letter from an insurance broker
or a municipal engineer, as to whether (1) any Closing Date Mortgaged
Property is a Flood Hazard Property and (2) the
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community in which any such Flood Hazard Property is located is
participating in the National Flood Insurance Program, (b) if there are
any such Flood Hazard Properties, such Borrower's written
acknowledgement of receipt of written notification from Administrative
Agent (1) as to the existence of each such Flood Hazard Property and
(2) as to whether the community in which each such Flood Hazard
Property is located is participating in the National Flood Insurance
Program, and (c) in the event any such Flood Hazard Property is located
in a community that participates in the National Flood Insurance
Program, evidence that Company has obtained flood insurance in respect
of such Flood Hazard Property to the extent required under the
applicable regulations of the Board of Governors of the Federal Reserve
System.
O. NO MATERIAL ADVERSE CHANGE. Agents (in their sole
discretion) shall be satisfied that there has been no material adverse change
(other than as disclosed in reports delivered pursuant to subsection 6.1(i) of
the DIP Credit Agreement) since December 31, 2002 in the business, property,
assets, operations, financial condition or prospects of Company and its
Subsidiaries taken as a whole, and Company shall have delivered to Agents an
Officer's Certificate to the foregoing effect.
P. CASH MANAGEMENT SYSTEM. The cash management system of
Company and its Subsidiaries shall be as set forth on Schedule 4.1P annexed
hereto.
Q. [INTENTIONALLY OMITTED]
R. GEOTHERMAL SALE. Company shall have consummated the
Geothermal Sale on terms and conditions and pursuant to documentation in form
and substance satisfactory to the Requisite DIP Lenders.
S. CPIH REORGANIZATION. On the Closing Date, (i) Company
shall own, directly or indirectly, 100% of the outstanding Capital Stock of CEA,
(ii) CEA shall own 100% of the outstanding common stock of CPIH, which shall own
the Capital Stock of all Persons (including Persons holding the equity interests
in other Persons) holding the assets and operations of the IPP International
Business to the extent described in the Approved Plan of Reorganization and the
Disclosure Statement related thereto, (iii) all relevant operating and
administrative expenses associated with the IPP International Business shall be
transferred into CPIH in accordance with the Management Services and
Reimbursement Agreement, and (iv) not less than $5,000,000 of cash for working
capital shall have been transferred from Company and its Subsidiaries to the
CPIH Borrowers as an equity contribution.
T. DISTRIBUTION. All unrestricted Cash On Hand
(including, without limitation, net sale proceeds from the Geothermal Sale) of
Borrowers remaining prior to the equity contribution referred to in subsection
4.1C(ii) but after (i) the transfer of working capital amounts to CPIH as
described in subsection 4.1S, (ii) the payment of the fees referred to in
subsection 4.1B, (iii) the disposition of those letters of credit referred to in
subsection 4.1F(i)(d), (iv) the payment of allowed administrative expenses, (v)
the reimbursement of reasonable accrued fees and expenses of DHC not to exceed
$4,000,000 in the aggregate and reasonable accrued fees and expenses of D.E.
Shaw not to exceed $350,000 in the aggregate, and (vi) the payment of funded
outstanding obligations under the DIP Credit Agreement (if any) and (without
duplication of clauses (i) through
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(vi)) the payment of other "Exit Costs" (as defined in the Approved
Reorganization Plan), subject to an amount of cash (which amount shall be
determined in accordance with terms set forth in the draft Plan of
Reorganization attached (on the date of execution thereof) to the Investment and
Purchase Agreement dated as of December 2, 2003 between DHC and Company) to be
retained in the domestic Cash Management System by Company and its Subsidiaries
(collectively, such Cash On Hand, net of such transferred amount, such payments
and reimbursements, such retained amount and such reserves, is referred to
herein as "DISTRIBUTABLE CASH"), shall have been distributed as follows: first,
to the extent of the first $60,000,000 of such Distributable Cash, for the
benefit of the holders of Prepetition Secured Claims that are Lenders on the
Closing Date, on account of their allowed pre-petition exposure, in accordance
with the Approved Plan of Reorganization, second, to the extent of the next
$7,200,000 of such Distributable Cash, for the benefit of those holders of
Prepetition Secured Claims that are not Lenders on the Closing Date, on account
of any remaining allowed pre-Petition Date exposure, in accordance with the
Approved Plan of Reorganization, and third, to the extent of 25% of any
remaining Distributable Cash, to Company (the amount of Distributable Cash so
distributed to Company being referred to herein as the "CLOSING DATE RETAINED
AMOUNT"), and to the extent of the remaining 75%, for the benefit of the holders
of Prepetition Secured Claims, on account of any remaining allowed pre-Petition
Date exposure, in accordance with the Approved Plan of Reorganization.
U. NOL AVAILABILITY. Company, its independent advisers,
Agents and Agents' counsel shall have determined to their respective sole
satisfaction that the net operating losses disclosed to Agents and Lenders prior
to the Closing Date as being held by DHC are available and accessible to Company
and its Subsidiaries.
V. LITIGATION. On the Closing Date, there shall be no
action, suit, investigation, litigation or proceeding pending or threatened in
any court or before any arbitrator or governmental instrumentality that purports
to affect the Approved Plan of Reorganization, any of the Credit Documents or
any of the CPIH Term Loan Documents that could reasonably be expected to have a
Material Adverse Effect or a material adverse effect on the Approved Plan of
Reorganization, any of the Credit Documents or any of the CPIH Term Loan
Documents.
W. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Agents, acting on behalf of Lenders, and their counsel shall be
satisfactory in form and substance to Agents and such counsel, and Agents and
such counsel shall have received all such counterpart originals or certified
copies of such documents as Agents may reasonably request.
X. LENDER REQUIREMENTS. Each Person that is a Lender on
the Closing Date (each such Lender being a "CLOSING DATE LENDER"), at its own
expense, either (i) shall have provided Issuing Lenders with evidence
satisfactory to Issuing Lenders that such Closing Date Lender has long term
senior unsecured debt ratings in effect on the Closing Date of (a) if such
Closing Date Lender is not a DIP Xxxxxx, "X0" or better from Xxxxx'x and "A" or
better from S&P, and (b) if such Closing Date Lender is a DIP Lender, "Baa3" or
better from Xxxxx'x and "BBB-" or better from S&P, or (ii) shall have delivered
to Issuing Lenders, at such Closing Date Lender's option, either (a) evidence
satisfactory to Issuing Lenders that the Letter of Credit Commitment of such
Closing Date Lender is irrevocably guaranteed or similarly supported
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pursuant to arrangements (and by Persons) reasonably satisfactory to
Administrative Agent and Issuing Lenders, or (b) cash collateral supporting the
maximum amount of the Letter of Credit Commitment of such Closing Date Lender
pursuant to documentation and arrangements reasonably satisfactory to
Administrative Agent and Issuing Lenders.
Each Lender, by delivering to Agents a signed counterpart to
this Agreement, shall be deemed (unless such Lender indicates otherwise in
writing to Agents and Company) to have acknowledged receipt of, and to have
consented to, approved and be satisfied with, the documents, agreements,
instruments or information which require approval, consent or satisfaction of
the Lenders or Requisite Lenders, as applicable, in order for the conditions
precedent contained in this subsection 4.1 to be satisfied.
Notwithstanding anything in this Section 4 to the contrary, it
is understood and agreed that the conditions of subsection 4.1A(i) shall be
deemed satisfied notwithstanding (i) failure to deliver all of the certificates
or other evidence of good standing described in subsection 4.1A(i), so long as
(a) Administrative Agent is notified which certificates or other evidence shall
not have been delivered and, in its sole discretion, agrees that such
certificates or other evidence may be delivered with respect to the relevant
Persons after the Closing Date, (b) failure to deliver all of the certificates
or other evidence of good standing described in subsection 4.1A(i) on or prior
to the date which is 90 days after the Closing Date shall constitute an
immediate Event of Default on such date (unless such failure is due to failure
to pay franchise taxes full payment of which has been tendered by such date), or
(ii) failure to deliver all or any portion of the title insurance-related
documents and instruments described in subsection 4.1N with respect to the Real
Property Asset located in Lassen County, California, provided, that failure to
deliver all of such documents and instruments with respect to such property on
or prior to the date which is 360 days after the Closing Date shall constitute
an immediate Event of Default on such date.
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement, to
induce Issuing Lenders to issue Letters of Credit and to induce Lenders to
purchase participations therein, Company represents and warrants to each Lender,
on the date of this Agreement, on the Closing Date and (in the case of the
representations and warranties referenced in subsection 3.1B(iii)(b)) on the
date of issuance of a replacement or extension of any Letter of Credit, that the
following statements are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING,
BUSINESS AND SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Credit Party is a
corporation, partnership, trust or limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization as specified in Schedule 5.1 annexed hereto (provided, however,
that failure of any Credit Party to be in good standing in the relevant
jurisdiction shall not be deemed a breach of this representation if (x) such
failure is due solely to failure to pay franchise taxes and (y) full payment of
such franchise taxes has been tendered no later than the date which is 90 days
after the Closing Date). Each Credit Party has all requisite
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power and authority to own and operate its properties, to carry on its business
as now conducted and as proposed to be conducted, to enter into the Credit
Documents to which it is a party and to carry out the transactions contemplated
thereby. Each Credit Party is in compliance with all material terms of its
Organizational Documents.
B. QUALIFICATION AND GOOD STANDING. Each Credit Party is
qualified to do business and in good standing in every jurisdiction necessary to
carry out its business and operations, except in jurisdictions where the failure
to be so qualified or in good standing has not had and could not reasonably be
expected to have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Company and its Subsidiaries are
engaged only in the businesses permitted to be engaged in pursuant to subsection
7.12.
D. SUBSIDIARIES. All of the Subsidiaries of Company as
of the Closing Date and their jurisdictions of organization are identified in
Schedule 5.1 annexed hereto. The Capital Stock of each of the Subsidiaries of
Company identified in Schedule 5.1 annexed hereto is duly authorized, validly
issued, fully paid and nonassessable and none of such Capital Stock constitutes
Margin Stock. Each of the Subsidiaries of Company identified in Schedule 5.1
annexed hereto is a corporation, partnership, trust or limited liability company
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of organization set forth therein, has all requisite
power and authority to own and operate its properties and to carry on its
business as now conducted and as proposed to be conducted, and is qualified to
do business and in good standing in every jurisdiction necessary to carry out
its business and operations, in each case except where failure to be so
qualified or in good standing or a lack of such power and authority has not had
and could not reasonably be expected to have a Material Adverse Effect. Schedule
5.1 annexed hereto correctly sets forth, as of the Closing Date, the ownership
interest of Company and each of its Subsidiaries in each of the Subsidiaries of
Company identified therein.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery
and performance of the Credit Documents have been duly authorized by all
necessary action on the part of each Credit Party that is a party thereto.
B. NO CONFLICT. The execution, delivery and performance
by Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to Company or any of its Subsidiaries, the Organizational
Documents of Company or any of its Subsidiaries or any order, judgment or decree
of any court or other Government Authority binding on Company or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
Company or any of its Subsidiaries, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Company or any of
its Subsidiaries, other than any Liens created under any of the Credit Documents
in favor of Collateral Agent on behalf of Secured Parties, or (iv) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of
69
Company or any of its Subsidiaries, except for (x) such approvals or consents
which will be obtained on or before the Closing Date and disclosed in writing to
Lenders.
C. GOVERNMENTAL CONSENTS. The execution, delivery and
performance by Credit Parties of the Credit Documents to which they are parties
and the consummation of the transactions contemplated by the Credit Documents do
not and will not require any Governmental Authorization, except for the entry of
the Confirmation Order and except for filings expressly contemplated by the
Credit Documents and those Governmental Authorizations which have been obtained.
D. BINDING OBLIGATION. Each of the Credit Documents has
been duly executed and delivered by each Credit Party that is a party thereto
and is the legally valid and binding obligation of such Credit Party,
enforceable against such Credit Party in accordance with its respective terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability.
E. RESTRICTIONS ON TRANSFER. There are no restrictions
on any Borrower or any of its Subsidiaries which prohibit or otherwise restrict
the transfer of cash or other assets from one to another, other than (i)
prohibitions or restrictions existing under or by reason of (a) this Agreement
and the other Credit Documents, (b) applicable law, (c) customary non-assignment
provisions entered into in the ordinary course of business and consistent with
past practices, and (d) any documents or instruments governing the terms of any
Indebtedness or other obligations secured by Liens permitted by subsection 7.2A,
provided that such prohibitions or restrictions apply only to the assets subject
to such Liens, and (ii) restrictions described in clauses (a) through (d) of
subsection 7.2D.
5.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders'
request, (i) the audited consolidated financial statements of Company and its
Subsidiaries for the Fiscal Year ended December 31, 2002 and (ii) the unaudited
consolidated financial statements of Company and its Subsidiaries for the Fiscal
Quarters ended March 31, 2003, June 30, 2003 and September 30, 2003. All such
statements were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position (on a consolidated and, where
applicable, consolidating basis) of the entities described in such financial
statements as at the respective dates thereof and the results of operations and
cash flows (on a consolidated and, where applicable, consolidating basis) of the
entities described therein for each of the periods then ended, subject, in the
case of any such unaudited financial statements, to changes resulting from audit
and normal year-end adjustments. No Borrower has, as of the Closing Date, any
Contingent Obligation, contingent liability or unusual long-term commitment that
is not reflected in the foregoing financial statements or the notes thereto and,
as of any Funding Date subsequent to the Closing Date, is not reflected in the
most recent financial statements delivered to Lenders pursuant to subsection 6.1
or the notes thereto (other than (a) those liabilities reflected on the
Schedules to this Agreement and (b) Performance Guaranties and Contingent
Obligations that are permitted to be incurred under subsection 7.4) and that, in
any such case, is material in relation to the
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business, operations, properties, assets or financial condition of Company or
any of its Subsidiaries taken as a whole.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED PAYMENTS.
Since December 31, 2002, no event or change has occurred
(other than as disclosed in reports delivered pursuant to subsection 6.1(i) of
the DIP Credit Agreement) that has resulted in or evidences, either in any case
or in the aggregate, a Material Adverse Effect. Since the Petition Date, neither
Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Payment or agreed to do so except (i) as permitted by subsection 7.5, and (ii)
as was permitted by subsection 7.5 of the DIP Credit Agreement.
5.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY; INTELLECTUAL
PROPERTY.
A. TITLE TO PROPERTIES; LIENS. Company and its
Subsidiaries have (i) good, sufficient and legal title to (in the case of fee
interests in real property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), or (iii) good title to (in
the case of all other personal property), all of their respective material
properties and assets reflected in the financial statements referred to in
subsection 5.3 or in the most recent financial statements delivered pursuant to
subsection 6.1, in each case except for assets disposed of since the date of
such financial statements in the ordinary course of business or as otherwise
permitted under subsection 7.7. Except as permitted by this Agreement, all such
properties and assets are free and clear of Liens.
B. REAL PROPERTY. As of the Closing Date, Schedule 5.5B
annexed hereto contains a true, accurate and complete list of (i) all fee
interests in any Real Property Assets and (ii) all leases, subleases or
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting each Real Property Asset,
regardless of whether a Borrower is the landlord or tenant (whether directly or
as an assignee or successor in interest) under such lease, sublease or
assignment. Except as specified in Schedule 5.5B annexed hereto, each agreement
listed in clause (ii) of the immediately preceding sentence is in full force and
effect and no Borrower has knowledge of any material default that has occurred
and is continuing thereunder, and each such agreement constitutes the legally
valid and binding obligation of each applicable Borrower, enforceable against
such Borrower in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles.
C. INTELLECTUAL PROPERTY. As of the Closing Date,
Schedule 5.5C annexed hereto contains a true, accurate and complete list of all
material Intellectual Property. Each of Company and its Subsidiaries owns or has
the right to use all material Intellectual Property used in the conduct of its
business, and none of such Intellectual Property conflicts with a right of any
other Person to the extent such conflict could reasonably be expect to result in
a Material Adverse Effect.
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5.6 LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 5.6 annexed hereto, there are
no Proceedings (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, or before or by any court or other Government
Authority (including any Environmental Claims) that are pending or, to the
knowledge of any Borrower, threatened against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries and that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither Company nor any of its Subsidiaries (i) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate (together with all such Proceedings with
respect to substantially similar or related matters), would reasonably be
expected to result in a Material Adverse Effect, or (ii) is subject to or in
default with respect to any final judgments, writs, injunctions, decrees, rules
or regulations of any court or other Government Authority that, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all material
tax returns and reports of Company and its Subsidiaries required to be filed by
any of them have been timely filed, and all taxes shown on such tax returns to
be due and payable (other than taxes represented by the Tax Note) and all
assessments, fees and other governmental charges upon Company and its
Subsidiaries and upon their respective properties, assets, income, businesses
and franchises that are due and payable have been paid when due and payable. No
Borrower knows of any proposed tax assessment against Company or any of its
Subsidiaries, that Company or its Subsidiaries dispute or disagree with, that is
not being actively contested by Company or such Subsidiary in good faith and by
appropriate proceedings; provided that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIAL CONTRACTS.
A. Except as set forth on Schedule 5.8A annexed hereto,
after giving effect to the Approved Plan of Reorganization, neither Company nor
any of its Subsidiaries is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
of its Contractual Obligations, and no condition exists that, with the giving of
notice or the lapse of time or both, would constitute such a default except
where the consequences, direct or indirect, of such default or defaults, if any,
could not reasonably be expected to have a Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a
party to or is otherwise subject to (i) any agreements or instruments the
performance of which, in the ordinary course, would reasonably be expected to
result in a Material Adverse Effect, or (ii) any charter or other internal
restrictions which, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
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C. Schedule 5.8C contains a true, correct and complete
list of all the Material Contracts in effect on the Closing Date after giving
effect to the Approved Plan of Reorganization. Except as described on Schedule
5.8C, all such Material Contracts are in full force and effect and no material
defaults currently exist thereunder.
5.9 GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to
regulation under (i) the Public Utility Holding Company Act of 1935, (ii) the
Federal Power Act (other than as a "qualifying small power production facility",
as such term is defined in PURPA), (iii) the Interstate Commerce Act, (iv) the
Investment Company Act of 1940, or (v) any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable.
5.10 SECURITIES ACTIVITIES.
A. Neither Company nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
B. Not more than 25% of the value of the assets (either
of Company only or of Company and its Subsidiaries on a consolidated basis)
subject to the provisions of subsection 7.2 or 7.7 or subject to any restriction
contained in any agreement or instrument, between Company and any Lender or any
Affiliate of any Lender, relating to Indebtedness and within the scope of
subsection 8.2, will be Margin Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Company, each of its Subsidiaries and, with respect
to Pension Plans and Multiemployer Plans, each of their respective ERISA
Affiliates are in material compliance with all applicable provisions and
requirements of ERISA, the regulations and published interpretations thereunder
and other applicable law with respect to each Employee Benefit Plan, and have
performed all of their material obligations under each Employee Benefit Plan.
Company and each of its Subsidiaries are in material compliance with all
applicable laws and orders of foreign Government Authorities with respect to
each of its pension plans and employee benefit plans for foreign employees, and
have performed all of their material obligations under each such pension plan
and employee benefit plan. Each Employee Benefit Plan that is intended to
qualify under Section 401(a) of the Internal Revenue Code has received, or has
timely taken all action necessary to receive, a favorable determination letter
from the Internal Revenue Service to such effect and no event has occurred
(other than the enactment of legislation for which the remedial amendment period
has not expired) that would reasonably be expected to affect adversely such
Plan's qualification.
B. No ERISA Event has occurred or is reasonably expected
to occur.
C. Except to the extent required under Section 4980B of
the Internal Revenue Code or except as set forth in Schedule 5.11 annexed hereto
or in the financial statements delivered to Lenders pursuant to subsection 4.1
or 6.1 hereof, as applicable, no Employee Benefit
73
Plan provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of Company or any of its
Subsidiaries (including CPIH Subsidiaries, to the extent such CPIH Subsidiaries
are ERISA Affiliates of Company or any of its Subsidiaries).
D. As of January 1 of each year (based on, with respect
to the Covanta Energy Pension Plan, the actuarial valuation as of such January 1
and, with respect to the SEIU Pension Plan, the actuarial valuation as of the
immediately preceding June 1), the amount of unfunded benefit liabilities (as
defined in Section 4001(a)(18) of ERISA, but determined on the basis of the
actuarial assumptions used for funding purposes with respect to a Pension Plan
(as set forth in Section 412 of the Internal Revenue Code, including, where
applicable, the interest rate assumptions set forth in Section 412(l) of the
Internal Revenue Code)), in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed (i) $20,000,000, in the event the
applicable law (including statutorily prescribed actuarial assumptions) used in
determining such unfunded benefit liabilities (the "ASSUMPTIONS") is generally
as favorable as the Assumptions used in the 2003 plan year valuations with
respect to such Pension Plans, or (ii) $26,000,000, in the event the Assumptions
are generally less favorable than the Assumptions used in the 2003 plan year
valuations with respect to such Pension Plans.
E. To each Borrower's knowledge, as of the most recent
valuation date for each Multiemployer Plan for which the actuarial report (or an
estimate provided pursuant to Section 4221(e) of ERISA) is reasonably available
to Company, the potential withdrawal liability of Company, its Subsidiaries and
their respective ERISA Affiliates for a complete withdrawal from such
Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with the potential liability for a complete withdrawal from all other
Multiemployer Plans for which such actuarial report (or an estimate provided
pursuant to Section 4221(e) of ERISA) is reasonably available to Company, based
on the information contained in such reports, would not reasonably be expected
to exceed $7,500,000.
F. Neither Company nor any Subsidiary has incurred or is
reasonably expected to incur any material liability pursuant to Title IV of
ERISA with respect to any employee benefit plan of an entity that was formerly
an ERISA Affiliate of Company or any of its Subsidiaries or with respect to any
employee benefit plan that was previously maintained by Company or any of its
Subsidiaries (including CPIH Subsidiaries, to the extent such CPIH Subsidiaries
are ERISA Affiliates of Company or any of its Subsidiaries).
5.12 CERTAIN FEES.
No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby, and
each Borrower hereby indemnifies Lenders against, and agrees that it will hold
Lenders harmless from, any claim, demand or liability for any such broker's or
finder's fees alleged to have been incurred in connection herewith or therewith
and any expenses (including reasonable fees, expenses and disbursements of
counsel) arising in connection with any such claim, demand or liability.
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5.13 ENVIRONMENTAL PROTECTION.
A. Except as set forth in Schedule 5.13 annexed hereto,
neither Company nor any of its Subsidiaries (including, solely with respect to
periods prior to the Closing Date, CPIH Subsidiaries) nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to (a)
any Environmental Law, (b) any Environmental Claim, or (c) any Hazardous
Materials Activity that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or impose liability on any Lender or
Agent;
B. Except as set forth in Schedule 5.13 annexed hereto,
neither Company nor any of its Subsidiaries (including, solely with respect to
periods prior to the Closing Date, CPIH Subsidiaries) has received any letter or
request for information under Section 104 of CERCLA or any comparable state law
regarding any condition, occurrence or activity that could reasonably be
expected to form the basis of an Environmental Claim against Company or any of
its Subsidiaries (including, solely with respect to periods prior to the Closing
Date, CPIH Subsidiaries) that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect or impose liability on
any Lender or Agent;
C. Except as set forth in Schedule 5.13 annexed hereto,
there are and, to Company's knowledge, have been no conditions, occurrences, or
Hazardous Materials Activities that could reasonably be expected to form the
basis of an Environmental Claim against Company or any of its Subsidiaries
(including, solely with respect to periods prior to the Closing Date, CPIH
Subsidiaries) that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or impose liability on any Lender or
Agent;
D. Except as set forth in Schedule 5.13 annexed hereto,
(i) neither Company nor any of its Subsidiaries (including, solely with respect
to periods prior to the Closing Date, CPIH Subsidiaries) nor, to Company's
knowledge, any predecessor of Company or any of its Subsidiaries (including,
solely with respect to periods prior to the Closing Date, CPIH Subsidiaries) has
filed any notice under any Environmental Law indicating past or present
treatment of Hazardous Materials at any Facility, (ii) none of Company's or any
of its Subsidiaries' Facilities constitute facilities for the treatment, storage
or disposal of Hazardous Materials under RCRA or any state equivalent, and (iii)
none of Company's or any of its Subsidiaries' operations involves the
generation, transportation, treatment, storage or disposal of hazardous waste in
violation of RCRA or any state equivalent that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect or
impose liability on any Lender or Agent; and
E. Compliance with all current requirements pursuant to
or under Environmental Laws would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect or impose liability on any
Lender or Agent.
5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
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5.15 MATTERS RELATING TO COLLATERAL.
A. CREATION, PERFECTION AND PRIORITY OF LIENS. The
execution and delivery of the Collateral Documents by Credit Parties, together
with (x) the actions taken on or prior to the date hereof pursuant to
subsections 4.1M, 4.1N, 6.8, 6.9 and 6.11 and (y) the delivery to Collateral
Agent of any Pledged Collateral of the Credit Parties not delivered to
Collateral Agent at the time of execution and delivery of the applicable
Collateral Document (all of which Pledged Collateral has been so delivered) are
effective to create in favor of Collateral Agent, for the benefit of Secured
Parties, a Lien on all of the Collateral of the Credit Parties (which Lien has
priority over any other Lien on such Collateral, subject to Permitted
Encumbrances and Liens permitted under subsection 7.2A), and all filings and
other actions necessary or desirable to perfect and maintain the perfection and
such priority of such Liens have been duly made or taken and remain in full
force and effect, other than the filing of any UCC financing statements
delivered to Collateral Agent for filing (but not yet filed) and the periodic
filing of UCC continuation statements in respect of UCC financing statements
filed by or on behalf of Collateral Agent.
B. GOVERNMENTAL AUTHORIZATIONS. No authorization,
approval or other action by, and no notice to or filing with, any Government
Authority is required for either (i) the pledge or grant by any Credit Party of
the Liens purported to be created in favor of Collateral Agent pursuant to any
of the Collateral Documents or (ii) the exercise by Collateral Agent of any
rights or remedies in respect of any Collateral (whether specifically granted or
created pursuant to any of the Collateral Documents or created or provided for
by applicable law), except (a) for filings or recordings contemplated by
subsection 5.15A, (b) as may be required, in connection with the disposition of
any Pledged Collateral, by laws generally affecting the offering and sale of
securities, and (c) authorizations and approvals in respect of the exercise of
rights or remedies as to any collateral of any Credit Party which is subject to
regulation under the Federal Power Act pursuant to Section 210(e)(2) of PURPA.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may
have been filed in favor of Collateral Agent as contemplated by subsection 5.15A
and to evidence Liens permitted pursuant to subsection 7.2, (i) no effective UCC
financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or recording
office, and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO.
D. MARGIN REGULATIONS. The pledge of the Pledged
Collateral pursuant to the Collateral Documents does not violate Regulation T, U
or X of the Board of Governors of the Federal Reserve System.
E. INFORMATION REGARDING COLLATERAL. All information
supplied to Collateral Agent by any Credit Party (including its officers,
employees, agents, advisors, representatives or counsel) with respect to any of
the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
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5.16 DISCLOSURE.
No representation or warranty of Company or any of its
Subsidiaries (including CPIH Subsidiaries) contained in any Credit Document or
in any other certificate or written statement (excluding the projections, pro
forma financial statements and forward looking statements contained therein and
the estimates contained in such projections, pro forma financial statements and
forward looking statements) furnished to Lenders by Company or any of its
Subsidiaries (including CPIH Subsidiaries), including any such Person's
officers, employees, agents, advisors, representatives or counsel, for use in
connection with the transactions contemplated by this Agreement, contained as of
the date such representation or warranty was made any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements contained herein or therein not misleading in any material respect in
light of the circumstances in which the same were made and in light of such
representations and warranties and all such prior representations and
warranties, taken as a whole. Any projections and pro forma financial
information contained in such materials are based upon good faith estimates and
assumptions believed by each Borrower to be reasonable at the time made, it
being recognized by Lenders that such projections as to future events are
subject to significant business, economic, regulatory and competitive
uncertainties and contingencies, and, accordingly, no assurances are given and
no representations or warranties are made by Company or any of its Subsidiaries
that any of the estimates and assumptions are correct, that the projections will
be achieved or that the forward looking statements expressed in such information
will correspond to actual results.
5.17 CASH MANAGEMENT SYSTEM.
The summary of the Cash Management System attached hereto as
Schedule 4.1P is accurate and complete in all material respects as of the
Closing Date and does not omit to state any material fact necessary to make the
statements set forth therein not misleading. No Borrower has any Deposit Account
which is not described in Schedule 4.1P other than Deposit Accounts permitted to
be owned after the Closing Date pursuant to subsection 6.10. There has been no
change to the Cash Management System since the Closing Date except such changes
as are permitted under subsection 6.10 and such other changes as have been
disclosed to Lenders in writing and approved by Administrative Agent.
5.18 MATTERS RELATING TO CREDIT PARTIES.
A. CREDIT PARTIES. Neither Company nor any of its
Subsidiaries owns any interest in any Subsidiary which is not a Borrower (other
than Excluded Subsidiaries).
B. DOMESTIC SUBSIDIARY ASSETS. Each Subsidiary which is
a Borrower has granted a Lien in favor of Collateral Agent on substantially all
of its property (other than the Capital Stock of CPIH) pursuant to the
Collateral Documents, except in any case where the grant of such Lien would
constitute a material violation of a valid and enforceable Contractual
Obligation in favor of or for the benefit of a Person other than Company or any
of its Subsidiaries and their respective Affiliates for which the required
consents have not been obtained.
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C. SUBSIDIARY CAPITAL STOCK. The Capital Stock of each
Subsidiary which is directly owned by any Borrower has been pledged to
Collateral Agent pursuant to the Collateral Documents, except for the Capital
Stock of those Subsidiaries (other than Borrowers) (i) which is subject to a
Lien permitted under subsection 7.2A securing Indebtedness permitted under
subsection 7.1, or (ii) the pledge of which would constitute a material
violation of (a) a valid and enforceable Contractual Obligation in favor of or
for the benefit of a Person other than Company or any of its Subsidiaries and
their respective Affiliates for which the required consents have not been
obtained or (b) applicable law affecting such Borrower or such Subsidiary.
5.19 INVESTIGATION.
All obligations in existence immediately after the Closing
Date (other than obligations that do not, in the aggregate, exceed $2,000,000)
to extend credit or credit support or obtain the extension of credit or credit
support or to make investments or expenditures with respect to existing or
future Projects of any Borrower or any Subsidiary of any Borrower that are
contained in Contractual Obligations or of which Borrowers are otherwise aware
have been disclosed to Agents and the DIP Lenders prior to the Closing Date.
Borrowers have made such inquiry and investigation as is necessary to enable
Borrowers to make the representation contained in the preceding sentence.
5.20 MATTERS RELATING TO BANKRUPTCY PROCEEDINGS.
A. PLAN OF REORGANIZATION. There have been no material
modifications, amendments revisions or restatements of the Approved Plan of
Reorganization. Any representation and warranty made by Borrowers or any
Subsidiary in the Approved Plan of Reorganization is accurate, true and correct
in all material respects as of the Closing Date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were accurate, true and correct in all material
respects as of such earlier date).
B. CONFIRMATION ORDER. The Confirmation Order has been
entered by the Bankruptcy Court at least 11 days prior to the Closing Date. The
Confirmation Order has not been stayed pending any appeal or petition for review
or for rehearing.
5.21 SUBORDINATED INDEBTEDNESS.
The Obligations constitute senior indebtedness that is
entitled to the benefits of the subordination provisions, if any, of all
Indebtedness of Company and its Subsidiaries under the Unsecured Creditor Notes.
5.22 REPORTING TO IRS.
Company does not intend to treat the Letters of Credit and
related transactions as being a "reportable transaction" (within the meaning of
Treasury Regulation Section 1.6011-4). In the event Company determines to take
any action inconsistent with such intention, it will promptly notify
Administrative Agent thereof. Company acknowledges that one or more Lenders may
treat their Letters of Credit as part of a transaction that is subject to
Treasury Regulation section 1.6011-4 or section 301.6112-1, and Administrative
Agent and such Lender or Lenders,
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as applicable, may file such IRS forms or maintain such lists and other records
as they may determine is required by such Treasury Regulations.
5.23 SOLVENCY.
Borrowers (taken as a whole) and Company are, and, upon the
incurrence of any Obligations by such Borrowers on any date on which this
representation is made, will be, Solvent.
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS
Borrowers covenant and agree that, so long as any of the
Letter of Credit Commitments hereunder shall remain in effect and until payment
in full of all Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Borrowers shall perform, and shall cause each of their Subsidiaries to perform,
all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Borrowers will maintain, and cause each of their respective
Subsidiaries to maintain, a system of accounting established and administered in
accordance with sound business practices to permit preparation of financial
statements in conformity with GAAP. Borrowers will deliver to Administrative
Agent (and, promptly after receipt thereof, Administrative Agent will deliver a
copy to each Lender):
(i) Budget Report; Budget Update: as soon as available
and in any event no later than the 15th Business Day of each month
commencing with the 15th Business Day of April 2004, (a) for the month
most recently ended, a report in form satisfactory to Administrative
Agent reflecting the actual cash receipts and disbursements of Company
and its Subsidiaries for the preceding month with respect to each line
item described in the Budget for the current Fiscal Year and the
percentage and dollar variance of such amounts from the projected
amounts therefor set forth in (x) such Budget and (y) the Budget for
the current Fiscal Year as delivered pursuant to subsection 6.1(xvi),
accompanied by an Officer's Certificate from the chief financial
officer of Company certifying that such report accurately presents, in
all material respects, cash receipts and cash expenditures of Company
and its Subsidiaries for the periods indicated, and (b) a supplement to
the Budget for the current Fiscal Year, in the form of such Budget,
reflecting projected cash receipts and disbursements of Company and its
Subsidiaries for each month and each Fiscal Quarter remaining in the
current Fiscal Year with respect to each line item described in such
Budget, which supplement shall be accompanied by an Officer's
Certificate from the chief financial officer of Company certifying that
the projections contained in such supplement are based upon good faith
estimates and assumptions believed by Company to be reasonable at the
time made;
(ii) Events of Default, etc.: promptly upon any Officer of
Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
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Administrative Agent) or taken any other action with respect to a
claimed Event of Default or Potential Event of Default, (b) that any
Person has given any notice to Company or any of its Subsidiaries or
taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 8.2, (c) of any
condition or event that would be required to be disclosed in a current
report filed by Company with the Securities and Exchange Commission on
Form 8-K if Company were required to file such reports under the
Exchange Act, or (d) of the occurrence of any event or change that has
caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, an Officer's Certificate specifying the nature and
period of existence of such condition, event or change, or specifying
the notice given or action taken by any such Person and the nature of
such claimed Event of Default, Potential Event of Default, default,
event or condition, and what action Company has taken, is taking and
proposes to take with respect thereto;
(iii) Quarterly Financials: as soon as available and in any
event within 45 days after the end of each of the first three Fiscal
Quarters of each Fiscal Year, the consolidated balance sheet of Company
and its Subsidiaries as at the end of such Fiscal Quarter and the
related consolidated statement of income of Company and its
Subsidiaries for such Fiscal Quarter and the related consolidated
statements of stockholders' equity and cash flows of Company and its
Subsidiaries for the period from the beginning of the then current
Fiscal Year to the end of such Fiscal Quarter, setting forth in each
case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year, all in reasonable
detail and certified by the chief financial officer of Company that
they fairly present, in all material respects, the financial condition
of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments; provided, however, that so long as Company files a
quarterly report on Form 10Q with the Securities and Exchange
Commission for any Fiscal Quarter, Borrowers shall be required to
deliver a copy of such quarterly report in lieu of the financial
statements described in this subsection 6.1(iii);
(iv) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the
consolidated balance sheet of Company and its Subsidiaries as at the
end of such Fiscal Year and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows of Company
and its Subsidiaries for such Fiscal Year, setting forth in each case
in comparative form the corresponding figures for the previous Fiscal
Year, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present, in all material respects,
the financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated, and (b) an audit report thereon of independent
certified public accountants of recognized national standing selected
by Company and satisfactory to Administrative Agent, which report shall
(with respect to the audits for all Fiscal Years after 2003) be
unqualified, shall express no doubts, assumptions or qualifications
concerning the ability of Company and its Subsidiaries to continue as a
going concern, and shall (with respect to the audits for all Fiscal
Years including 2003) state that in the opinion of such certified
public accountants such consolidated financial statements fairly
present, in all material respects, the
80
consolidated financial position of Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP and that the
audit by such accountants in connection with such consolidated
financial statements has been made in accordance with auditing
standards generally accepted in the United States; provided, however,
that so long as Company files an annual report on Form 10K with the
Securities Exchange Commission, Borrowers shall be required to deliver
a copy of such annual report in lieu of the financial statements
described in clause (a);
(v) Compliance Certificates: together with each delivery
of financial statements of Company and its Subsidiaries pursuant to
subdivisions (iii) and (iv) above, (a) an Officer's Certificate of
Company stating that the signers have reviewed the terms of this
Agreement and have made, or caused to be made under their supervision,
a review in reasonable detail of the transactions and condition of
Company and its Subsidiaries during the accounting period covered by
such financial statements and that such review has not disclosed the
existence during or at the end of such accounting period, and that the
signers do not have knowledge of the existence as at the date of such
Officer's Certificate, of any condition or event that constitutes an
Event of Default or Potential Event of Default, or, if any such
condition or event existed or exists, specifying the nature and period
of existence thereof and what action Company has taken, is taking and
proposes to take with respect thereto; and (b) a Compliance Certificate
demonstrating in reasonable detail compliance during and at the end of
the applicable accounting periods with the restrictions contained in
Section 7, in each case to the extent compliance with such restrictions
is required to be tested at the end of the applicable accounting
period;
(vi) Reconciliation Statements: other than the fresh start
adjustments required under SOP 90-7, if, as a result of any change in
accounting principles and policies from those used in the preparation
of the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Company and its Subsidiaries
delivered pursuant to subdivisions (iii) or (iv) of this subsection 6.1
will differ in any material respect from the consolidated financial
statements that would have been delivered pursuant to such subdivisions
had no such change in accounting principles and policies been made,
then (a) together with the first delivery of financial statements
pursuant to subdivision (iii) or (iv) of this subsection 6.1 following
such change, consolidated financial statements of Company and its
Subsidiaries for (y) the current Fiscal Year to the effective date of
such change and (z) the two full Fiscal Years immediately preceding the
Fiscal Year in which such change is made, in each case prepared on a
pro forma basis as if such change had been in effect during such
periods, and (b) together with each delivery of financial statements
pursuant to subdivision (iii) or (iv) of this subsection 6.1 following
such change, if required pursuant to subsection 1.2, a written
statement of the chief accounting officer or chief financial officer of
Company setting forth the differences (including any differences that
would affect any calculations relating to the financial covenants set
forth in subsection 7.6) which would have resulted if such financial
statements had been prepared without giving effect to such change;
(vii) Accountants' Certification: together with each
delivery of consolidated financial statements of Company and its
Subsidiaries pursuant to subdivision (iv) above,
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a written statement by the independent certified public accountants
giving the report thereon stating that in connection with their audit,
nothing came to their attention that caused them to believe that
Company failed to comply with the terms, provisions or conditions of
subsection 7.6, insofar as they relate to financial and accounting
matters, or, if such a failure to comply has come to their attention,
specifying the nature and period of existence thereof (it being
understood that their audit is not directed primarily toward obtaining
knowledge of non-compliance and that such accountants shall not be
liable by reason of any failure to obtain knowledge of any such
non-compliance that would not be disclosed in the course of their
audit);
(viii) Accountants' Reports: promptly upon request of an
Agent (unless restricted by applicable professional standards), copies
of all reports submitted to Company by independent certified public
accountants in connection with each annual, interim or special audit of
the financial statements of Company and its Subsidiaries made by such
accountants, including any comment letter submitted by such accountants
to management in connection with their annual audit;
(ix) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by
Company to its security holders or by any Subsidiary of Company to its
security holders other than Company or another Subsidiary of Company,
(b) all regular and periodic reports and all registration statements
(other than on Form S-8 or a similar form) and prospectuses, if any,
filed by Company or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press
releases and other statements made available generally by Company or
any of its Subsidiaries to the public concerning material developments
in the business of Company or any of its Subsidiaries;
(x) Litigation or Other Proceedings: (a) promptly upon
any officer of Company obtaining knowledge of (1) the institution of,
or non-frivolous threat of, any Proceeding against or affecting Company
or any of its Subsidiaries or any property of Company or any of its
Subsidiaries not previously disclosed in writing by Company to Lenders
or (2) any material development in any Proceeding that, in the case of
both clauses (1) and (2):
I. if adversely determined, has a reasonable possibility
after giving effect to the coverage and policy limits
of insurance policies issued to Company and its
Subsidiaries of giving rise to a Material Adverse
Effect; or
II. seeks to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a
result of, or to contest or challenge the legality,
validity or enforceability of, the transactions
contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within twenty days after the end of each
Fiscal Quarter, a schedule of all Proceedings
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involving an alleged liability of, or claims against or affecting, an
Borrower equal to or greater than $1,000,000, and promptly after
request by Administrative Agent such other information as may be
reasonably requested by Administrative Agent to enable Administrative
Agent and its counsel to evaluate any of such Proceedings;
(xi) ERISA Events: with reasonable promptness upon
becoming aware of the occurrence of or forthcoming occurrence of (a)
any ERISA Event or (b) any event that would constitute an ERISA Event
but for the requirements (in order for such event to constitute an
ERISA Event) that a Lien or liability imposed as a result thereof be
material, that the error giving rise thereto be in bad faith, and/or
that such event would reasonably be expected to result in a Material
Adverse Effect, a written notice specifying the nature thereof, what
action Company, any of its Subsidiaries or any of their respective
ERISA Affiliates has taken, is taking or proposes to take with respect
thereto and, when known, any action taken or threatened in writing by
the Internal Revenue Service, the Department of Labor or the PBGC with
respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of
(a) all notices received by Company, any of its Subsidiaries or any of
their respective ERISA Affiliates from a Multiemployer Plan sponsor
concerning an ERISA Event; and (b) copies of such other documents or
governmental reports or filings relating to any Employee Benefit Plan
as Administrative Agent shall reasonably request (it being agreed that
commencing on the Closing Date, on an annual basis Borrowers shall
request information from each Multiemployer Plan in accordance with
section 4221 of ERISA to determine the potential withdrawal liability
of Company, its Subsidiaries and their respective ERISA Affiliates for
a complete withdrawal from such Multiemployer Plan);
(xiii) Insurance: as soon as practicable after any material
change in insurance coverage maintained by Company and its Subsidiaries
notice thereof to Administrative Agent specifying the changes and
reasons therefor;
(xiv) Governing Body: with reasonable promptness, written
notice of any change in the Governing Body of Company;
(xv) Material Contracts: promptly, and in any event within
10 Business Days after any Material Contract of Company or any of its
Subsidiaries is terminated or amended in a manner that is materially
adverse to Company or such Subsidiary, as the case may be, or any new
Material Contract is entered into, a written statement describing such
event with copies of such material amendments or new contracts, and an
explanation of any actions being taken with respect thereto;
(xvi) Budget: no later than the 15th day of December of
each year commencing with December 15, 2004, a budget for the next
Fiscal Year, in the form of the Budget for the current Fiscal Year,
reflecting (a) projected cash receipts and disbursements of Company and
its Subsidiaries for each month and each Fiscal Quarter in the next
Fiscal Year and (b) projected net cash flows of Company and its
Subsidiaries for each Fiscal Year following the next Fiscal Year and
ending with 2009, in each case with respect to each line item described
in the Budget for the current Fiscal Year, which budget shall be
83
accompanied by an Officer's Certificate from the chief financial
officer of Company certifying that the projections contained in such
budget are based upon good faith estimates and assumptions believed by
Company to be reasonable at the time made;
(xvii) New Restricted Accounts: promptly upon opening any
Restricted Account after the Closing Date that is required to be opened
by Company or any of its Subsidiaries pursuant to a Contractual
Obligation binding on such Person, a written notice setting forth in
reasonable detail (a) the Project or obligation to which such account
relates, (b) a description of the Contractual Obligation requiring such
account to be opened and (c) the provisions of this Agreement
permitting such account to be opened and maintained (it being
understood that such written notice shall be deemed to supplement
Schedule 2.3A(i)(f) annexed hereto for all purposes of this Agreement);
(xviii) Other Information: with reasonable promptness, such
other information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by any
Agent or Requisite Lenders (or by any Lender so long as such request is
made through an Agent (and Agents shall be required to request from
Borrowers any such information and data reasonably requested by a
Lender)); and
(xix) Notices from Holders of Subordinated Indebtedness:
promptly, upon receipt, copies of all notices from holders of
Subordinated Indebtedness or a trustee, agent or other representative
of such a holder.
6.2 EXISTENCE, ETC.
Except as permitted under subsection 7.7, Company will, and
will cause each of its Subsidiaries to, at all times preserve and keep in full
force and effect its existence and all rights and franchises material to its
business; provided, however that neither Company nor any of its Subsidiaries
shall be required to preserve the existence of any such Subsidiary or any such
right or franchise if the management or Governing Body of Company or such
Subsidiary shall determine that the preservation thereof is no longer desirable
in the conduct of the business of Company or such Subsidiary, as the case may
be, and the loss thereof could not reasonably be expected to have a Material
Adverse Effect.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX.
Company will, and will cause each of its Subsidiaries to, pay
all taxes, assessments and other governmental charges imposed upon it or any of
its properties or assets or in respect of any of its income, businesses or
franchises before any material penalty accrues thereon, and all claims
(including claims for labor, services, materials and supplies) for material sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such tax, assessment,
charge or claim need be paid if it is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long as
(i) such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor and (ii) in the case of a
tax, assessment, charge or claim which has or may become a Lien against any of
the Collateral, such proceedings
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conclusively operate to stay the sale of any portion of the Collateral to
satisfy such charge or claim.
6.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
INSURANCE/ CONDEMNATION PROCEEDS.
A. MAINTENANCE OF PROPERTIES. Company will, and will
cause each of its Subsidiaries to, maintain or cause to be maintained in good
repair, working order and condition, ordinary wear and tear excepted, all
material properties used or useful in the business of Company and its
Subsidiaries (including all Intellectual Property) and from time to time will
make or cause to be made all appropriate repairs, renewals and replacements
thereof, except that Company and its Subsidiaries shall not be required to
perform the foregoing obligations (i) with respect to Subsidiaries or assets to
which Persons other than Company and its Subsidiaries have recourse under
Limited Recourse Debt owed to such Persons or (ii) to the extent that failure to
perform such obligations would not reasonably be expected to have a Material
Adverse Effect.
B. INSURANCE. Company will maintain or cause to be
maintained, with financially sound and reputable insurers, such public liability
insurance, third party property damage insurance, business interruption
insurance and casualty insurance with respect to liabilities, losses or damage
in respect of the assets, properties and businesses of Company and its
Subsidiaries and, for not less than one year following the Closing Date, of CPIH
Subsidiaries (provided that Company shall not be required to maintain such
insurance with respect to CPIH Subsidiaries to the extent such insurance is not
commercially available to Company) as may customarily be carried or maintained
under similar circumstances by corporations of established reputation engaged in
similar businesses, in each case in such amounts (giving effect to
self-insurance), with such deductibles, covering such risks and otherwise on
such terms and conditions as shall be customary for corporations similarly
situated in the industry. Without limiting the generality of the foregoing,
Company will maintain or cause to be maintained (i) flood insurance with respect
to each Flood Hazard Property that is located in a community that participates
in the National Flood Insurance Program, in each case in compliance with any
applicable regulations of the Board of Governors of the Federal Reserve System,
and (ii) replacement value casualty insurance on the Collateral under such
policies of insurance, with such insurance companies, in such amounts, with such
deductibles, and covering such risks as are at all times satisfactory to
Administrative Agent in its commercially reasonable judgment. Unless prohibited
by contractual or other legal requirement, such policy of insurance shall (a)
name Collateral Agent for the benefit of Secured Parties as an additional
insured thereunder as its interests may appear and (b) in the case of each
business interruption and casualty insurance policy, contain a loss payable
clause or endorsement, satisfactory in form and substance to Administrative
Agent, that names Collateral Agent for the benefit of Secured Parties as the
loss payee thereunder for any covered loss in excess of $1,000,000 and provides
for at least 30 days prior written notice to Collateral Agent of any
modification or cancellation of such policy. As soon as practicable after the
Closing Date, Company shall deliver to Administrative Agent a certificate from
Borrowers' insurance broker(s) or other evidence satisfactory to it that all
insurance required to be maintained pursuant to this subsection 6.4 is in full
force and effect and that Collateral Agent on behalf of Secured Parties has been
named as additional insured and/or loss payee thereunder to the extent required
under this subsection 6.4.
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C. APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.
(i) Business Interruption Insurance. Upon receipt by
Company or any of its Subsidiaries of any business interruption
insurance proceeds constituting Net Insurance/Condemnation Proceeds,
(a) so long as no Event of Default or Potential Event of Default shall
have occurred and be continuing, Company or such Subsidiary may retain
and apply such Net Insurance/Condemnation Proceeds for working capital
purposes or any other purposes not prohibited under this Agreement, and
(b) if an Event of Default or Potential Event of Default shall have
occurred and be continuing, Company shall apply an amount equal to such
Net Insurance/Condemnation Proceeds as provided in subsection 2.3A.
(ii) Net Insurance/Condemnation Proceeds Received by
Company. Upon receipt by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds other than from business interruption
insurance, (a) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing, Company shall, or shall
cause one or more of its Subsidiaries to, promptly and diligently apply
such Net Insurance/Condemnation Proceeds to pay or reimburse the costs
of repairing, restoring or replacing the assets in respect of which
such Net Insurance/Condemnation Proceeds were received or, to the
extent not so applied, as provided in subsection 2.3A, and (b) if an
Event of Default or Potential Event of Default shall have occurred and
be continuing (unless Company is otherwise required to use funds by law
or contract), Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds as provided in subsection 2.3A.
(iii) Net Insurance/Condemnation Proceeds Received by
Administrative Agent or Collateral Agent. Upon receipt by
Administrative Agent or Collateral Agent, as the case may be, of any
Net Insurance/Condemnation Proceeds, (a) if and to the extent Company
would have been required to apply such Net Insurance/Condemnation
Proceeds (if it had received them directly) Administrative Agent or
Collateral Agent, as the case may be, shall, and Company hereby
authorizes Administrative Agent or Collateral Agent, as the case may
be, to, apply such Net Insurance/Condemnation Proceeds as provided in
subsection 2.3A, and (b) to the extent the foregoing clause (a) does
not apply Administrative Agent or Collateral Agent, as the case may be,
shall deliver such Net Insurance/Condemnation Proceeds to Company, and
(1) Company and its Subsidiaries may retain and apply any portion
thereof that is business interruption insurance proceeds for working
capital purposes or any other purposes not prohibited under this
Agreement and (2) Company shall, or shall cause one or more of its
Subsidiaries to, promptly apply such Net Insurance/Condemnation
Proceeds that are not business interruption insurance proceeds to the
costs of repairing, restoring, or replacing the assets in respect of
which such Net Insurance/Condemnation Proceeds were received; provided,
however that if at any time Administrative Agent reasonably determines
(A) that Company or such Subsidiary is not proceeding diligently with
such repair, restoration or replacement or that such repair,
restoration or replacement cannot be completed within 180 days after
the receipt by Administrative Agent or Collateral Agent, as the case
may be, of such Net Insurance/Condemnation Proceeds, Administrative
Agent or Collateral Agent, as the case may be, shall, and Company
hereby authorizes Administrative Agent or Collateral Agent,
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as the case may be, to, apply such Net Insurance/Condemnation Proceeds
as provided in subsection 2.3A.
Notwithstanding the foregoing, no Net Insurance/Condemnation
Proceeds shall be required to be applied as provided in subsection 2.3A to the
extent such application would constitute a material violation of (1) a valid
Contractual Obligation (in effect on the Closing Date or arising under the
documentation for Limited Recourse Debt permitted to be incurred under this
Agreement) in favor of or for the benefit of a Person other than Company or any
of its Subsidiaries or their respective Affiliates for which the required
consents have not been obtained or (2) applicable law affecting Company and its
Subsidiaries. Notwithstanding anything in this Agreement to the contrary, in the
event of any conflict or inconsistency between subsection 6.4C and the terms of
the Intercreditor Agreement, the terms of the Intercreditor Agreement shall
prevail.
6.5 INSPECTION RIGHTS; LENDER MEETING.
A. INSPECTION RIGHTS. Borrowers shall, and shall cause
each of their respective Subsidiaries to, permit any authorized representatives
designated by any Lender, at such Lender's expense, to visit and inspect any of
the properties of such Borrower or of any of its Subsidiaries, to inspect, copy
and take extracts from its and their financial and accounting records, and to
discuss its and their affairs, finances and accounts with its and their officers
and independent public accountants (provided that Company may, if it so chooses,
be present at or participate in any such discussion), all upon reasonable notice
and at such reasonable times during normal business hours and as often as may
reasonably be requested; provided that, at any time after the occurrence and
during the continuance of an Event of Default, Borrowers shall, and shall cause
each of their respective Subsidiaries to, permit such additional visits,
inspections and audits as Administrative Agent or Requisite Lenders may deem
necessary or advisable, at any time or from time to time, all at Borrowers'
expense.
B. LENDER MEETING. Company will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of Agents
and Lenders once during each Fiscal Year to be held at Company's corporate
offices (or at such other location as may be agreed to by Company and
Administrative Agent) at such time as may be agreed to by Company and
Administrative Agent.
6.6 COMPLIANCE WITH LAWS, ETC.
Borrowers shall comply, and shall cause each of their
Subsidiaries (including CPIH Subsidiaries) to comply, with the requirements of
all applicable laws, rules, regulations and orders of any Government Authority
(including all Environmental Laws), noncompliance with which could reasonably be
expected to cause, individually or in the aggregate, a Material Adverse Effect.
6.7 ENVIRONMENTAL MATTERS.
A. ENVIRONMENTAL DISCLOSURE. Company will deliver to
Administrative Agent:
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(i) Environmental Audits and Reports. As soon as
practicable following receipt thereof, copies of all environmental
audits, investigations, analyses and reports of any kind or character
(excluding writings which are protected by attorney-client privilege or
the work-product doctrine or confidential self-evaluative writings),
whether prepared by personnel of Company or any of its Subsidiaries or
by independent consultants, governmental authorities or any other
Persons, with respect to significant environmental matters at any
Facility that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect or impose liability on
any Lender or Agent or with respect to any Environmental Claims that,
individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect or impose liability on any Lender
or Agent;
(ii) Notice of Certain Releases, Remedial Actions, Etc.
Promptly upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release required to be reported to any
federal, state or local governmental or regulatory agency under any
applicable Environmental Laws that could reasonably be expected to have
a Material Adverse Effect or impose liability on any Lender or Agent,
(b) any remedial action taken by Company or any other Person in
response to (1) any Hazardous Materials Activities the existence of
which could reasonably be expected to result in one or more
Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect or imposing liability on any Lender or Agent,
or (2) any Environmental Claims that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect or
impose liability on any Lender or Agent;
(iii) Written Communications Regarding Environmental
Claims, Releases, Etc. As soon as practicable following the sending or
receipt thereof by Company or any of its Subsidiaries, a copy of any
and all written communications (excluding writings which are protected
by attorney-client privilege or the work-product doctrine or
confidential self-evaluative writings), with respect to (a) the
commencement or the threat to commence a proceeding regarding any
Environmental Claims that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect or impose
liability on any Lender or Agent, (b) any Release required to be
reported to any federal, state or local governmental or regulatory
agency that could reasonably be expected to have a Material Adverse
Effect or impose liability on any Lender or Agent, and (c) any request
for information from any governmental agency that suggests such agency
is investigating whether Company or any of its Subsidiaries may be
potentially responsible for any Hazardous Materials Activity that could
reasonably be expected to have a Material Adverse Effect or impose
liability on any Lender or Agent;
(iv) Notice of Certain Proposed Actions Having
Environmental Impact. Prompt written notice describing in reasonable
detail (a) any proposed acquisition of stock, assets, or property by
Company or any of its Subsidiaries that could reasonably be expected to
(1) expose Company or any of its Subsidiaries to, or result in,
Environmental Claims that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect or impose
liability on any Lender or Agent or (2) affect the ability of Company
or any of its Subsidiaries to maintain in full force and effect all
Governmental Authorizations required under any Environmental Laws for
their
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respective operations except to the extent the failure to maintain such
Governmental Authorizations could not reasonably be expected to have a
Material Adverse Effect or impose liability on any Lender or Agent and
(b) any proposed action to be taken by Company or any of its
Subsidiaries to commence manufacturing or other industrial operations
or to modify current operations in a manner that could reasonably be
expected to subject Company or any of its Subsidiaries to any
additional obligations or requirements under any Environmental Laws
that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or impose liability on any Lender
or Agent; and
(v) Certain Communications. With respect to documents
which would have been required to be provided to Administrative Agent
pursuant to paragraph (i) or (iii) but for the parenthetical in those
paragraphs, Company shall promptly upon receiving such documents
provide a list identifying generally the documents not disclosed and
summarizing the information contained in such documents to the extent
consistent with not waiving any privilege with respect thereto. If the
privilege prevents Company from summarizing the information contained
in such documents Company (a) shall nevertheless advise Administrative
Agent that a matter, the nature of which cannot be disclosed without
waiving the applicable privilege, exists with respect to a specified
Facility or Environmental Claim that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect and
(b) shall provide such other information to Administrative Agent,
consistent with not waving the privilege, that Administrative Agent may
reasonably request.
B. COMPANY'S ACTIONS REGARDING ENVIRONMENTAL CLAIMS AND
VIOLATIONS OF ENVIRONMENTAL LAWS. Company shall promptly take, and shall cause
each of its Subsidiaries promptly to take, any and all actions necessary to (i)
cure any violation of applicable Environmental Laws by Company or its
Subsidiaries (including, solely with respect to periods prior to the Closing
Date, CPIH Subsidiaries) that could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect and (ii) make an appropriate
response to any Environmental Claim against Company or any of its Subsidiaries
(including, solely with respect to periods prior to the Closing Date, CPIH
Subsidiaries) and discharge any obligations it may have to any Person thereunder
where failure to do so could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect (except if Company and its Subsidiaries
do not have standing to contest or respond to such Environmental Claim);
provided, however, that Company may, without breaching the requirements of this
subsection 6.7B, contest an alleged violation of Environmental Laws or an
Environmental Claim in good faith by appropriate proceedings promptly instituted
and diligently conducted so long as during such contest the failure to cure such
violation or to respond to such Environmental Claim or discharge the obligations
thereunder could not reasonably be expected to result in a Material Adverse
Effect.
6.8 EXECUTION OF BORROWER JOINDER AGREEMENT AND PERSONAL PROPERTY
COLLATERAL DOCUMENTS AFTER THE CLOSING DATE.
A. EXECUTION OF BORROWER JOINDER AGREEMENT AND PERSONAL
PROPERTY COLLATERAL DOCUMENTS. In the event that any Subsidiary of Company
existing on the Closing
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Date ceases to be an Excluded Subsidiary, Company will promptly notify
Administrative Agent of that fact and cause such Subsidiary promptly (and in any
event no later than 30 days after it ceases to be an Excluded Subsidiary) to
execute and deliver to Administrative Agent a Borrower Joinder Agreement and
counterparts of the Security Agreement and the Intercreditor Agreement and to
take all such further actions and execute all such further documents and
instruments (including actions, documents and instruments comparable to those
described in subsection 4.1M) as may be necessary or, in the opinion of
Administrative Agent, desirable to create in favor of Collateral Agent, for the
benefit of Secured Parties, a valid and perfected First Priority security
interest in all of the personal and mixed property assets of such Subsidiary
described in the applicable forms of Collateral Documents, subject to any Liens
in existence on the date such Subsidiary ceases to be an Excluded Subsidiary to
the extent permitted under subsection 7.2A, provided that at the request of
Company in connection with sales of assets permitted under subsection 7.7,
Administrative Agent shall, subject to the terms of the Intercreditor Agreement,
direct Collateral Agent (without need for any further consent from any Lender or
Lenders) to release any Liens on a Subsidiary's assets and/or release a
Subsidiary from this Agreement solely to the extent required by the terms of any
such sales permitted under this Agreement; provided, however, that no Capital
Stock of any Subsidiary that meets the criteria set forth in subsections
5.18C(i) or 5.18C(ii) shall be required to be pledged as Collateral pursuant to
this subsection.
B. SUBSIDIARY ORGANIZATIONAL DOCUMENTS, LEGAL OPINIONS,
ETC. Company shall deliver to Administrative Agent, together with the relevant
Credit Documents, (i) certified copies of Organizational Documents of each
Subsidiary which is becoming a Borrower pursuant to subsection 6.8A (each, an
"ADDITIONAL SUBSIDIARY BORROWER"), together with a good standing certificate
from the Secretary of State of the jurisdiction of such Subsidiary's
organization and each other state in which such Person is qualified to do
business and, to the extent generally available, a certificate or other evidence
of good standing as to payment of any applicable franchise or similar taxes from
the appropriate taxing authority of each of such jurisdictions, each to be dated
a recent date prior to their delivery to Administrative Agent, (ii) a
certificate executed by the secretary or similar officer of such Subsidiary as
to (a) the fact that the attached resolutions of the Governing Body of such
Subsidiary approving and authorizing the execution, delivery and performance of
such Credit Documents are in full force and effect and have not been modified or
amended and (b) the incumbency and signatures of the officers of such Subsidiary
executing such Credit Documents, and (iii) a favorable opinion of counsel to
such Subsidiary, in form and substance satisfactory to Administrative Agent and
its counsel, as to (a) the due organization and good standing of such
Subsidiary, (b) the due authorization, execution and delivery by such Subsidiary
of such Credit Documents, (c) the enforceability of such Credit Documents
against such Subsidiary and (d) such other matters (including matters relating
to the creation and perfection of Liens in any Collateral pursuant to such
Credit Documents) as Administrative Agent may reasonably request, all of the
foregoing to be satisfactory in form and substance to Administrative Agent and
its counsel.
C. RELEASE OF RESTRICTIONS. Borrowers shall use their
good faith, commercially reasonable efforts to obtain all necessary consents
from all Persons in whose favor or for whose benefit Contractual Obligations are
in effect which would be violated by (i) a pledge of the Capital Stock of any
Subsidiary of a Borrower, (ii) entry into a Borrower Joinder Agreement by a
Subsidiary which is not already a Borrower, or (iii) granting a Lien on
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substantially all of the assets of a Subsidiary. The foregoing efforts shall be
exercised so as to obtain such consents as soon as practicable but no later than
90 days after the Closing Date.
6.9 MATTERS RELATING TO ADDITIONAL REAL PROPERTY COLLATERAL.
From and after the Closing Date, in the event that any
Borrower acquires any fee interest in real property or any Material Leasehold
Property, such Borrower shall, as soon as practicable after such Person acquires
such real property or Material Leasehold Property, execute, acknowledge, file,
record, do and deliver all and any further acts, deeds, conveyances, mortgages,
hypothecations, pledges, charges, assignments, financing statements and
continuations thereof, notices of assignment, transfers, certificates,
assurances and other instruments, opinions, appraisals, title insurance and
environmental reports as Administrative Agent may reasonably request to perfect
and maintain the Liens created by the Collateral Documents, including, without
limitation, deliver to Collateral Agent in proper form for recording in all
appropriate places in all applicable jurisdictions, encumbering the interest of
such Borrower in such mortgaged property; and such opinions, appraisal,
documents, title insurance, environmental reports that would have been delivered
on the Closing Date if such mortgaged were a Closing Date Mortgaged Property,
and to assure, convey, assign, transfer and confirm unto Collateral Agent, for
the benefit of the Secured Parties, the property and rights thereby conveyed and
assigned or intended to now or hereafter be conveyed or assigned or that any
Borrower may be or may hereafter become bound to convey or to assign to
Administrative Agent.
6.10 DEPOSIT ACCOUNTS.
Borrowers shall, and shall cause each of their Subsidiaries
(other than Bankrupt Subsidiaries) to, maintain the Cash Management System as
described in Schedule 4.1P, as said Schedule 4.1P may be supplemented from time
to time pursuant to clause (i)(c) below, and Company and its Subsidiaries shall
not open or close Deposit Accounts or make other changes to the Cash Management
System without the written consent of Administrative Agent, except that (i)
Company and its Subsidiaries may open and maintain funds in Deposit Accounts
with Collateral Agent or other depository institutions after the Closing Date so
long as (a) concurrently with the opening of any such account with a depository
institution other than Collateral Agent, Borrowers shall deliver to
Administrative Agent a Control Agreement with respect to such account (unless
after giving effect to such opening Borrowers would not be in breach of the
requirement set forth in clause (i)(b)), (b) the aggregate amount on deposit at
any time in all Deposit Accounts maintained with depository institutions other
than Collateral Agent for which Control Agreements have not been delivered to
Administrative Agent shall not exceed $1,000,000, and (c) concurrently with the
opening of any such account, Borrowers shall deliver to Administrative Agent a
written notice setting forth the account number and the name of the relevant
depository institution (it being understood that such written notice shall be
deemed to supplement Schedule 4.1P annexed hereto for all purposes of this
Agreement) and, if applicable, the Project to which such account relates and the
primary purpose of such account, and (ii) after the Closing Date Company and its
Subsidiaries may open and maintain funds in Restricted Accounts that are
required to be opened by Company or any of its Subsidiaries pursuant to a
Contractual Obligation binding on such Person so long as promptly upon opening
any such account, a written notice setting forth in reasonable detail (a) the
Project or obligation to which
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such account relates, (b) a description of the Contractual Obligation requiring
such account to be opened, and (c) the provisions of this Agreement permitting
such account to be opened and maintained (it being understood that such written
notice shall be deemed to supplement Schedule 2.3A(i)(f) annexed hereto for all
purposes of this Agreement).
6.11 FURTHER ASSURANCES.
A. ASSURANCES. Without expense or cost to Agents or
Lenders, each Borrower shall from time to time hereafter execute, acknowledge,
file, record, do and deliver all and any further acts, deeds, conveyances,
mortgages, deeds of trust, deeds to secure debt, security agreements,
hypothecations, pledges, charges, assignments, financing statements and
continuations thereof, notices of assignment, transfers, certificates,
assurances and other instruments as Administrative Agent may from time to time
reasonably request and that do not involve a material expansion of Borrowers'
obligations or liabilities hereunder in order to carry out more effectively the
purposes of this Agreement, the other Credit Documents and the Confirmation
Order, including to subject any Collateral, intended to now or hereafter be
covered, to the Liens created by the Collateral Documents and the Confirmation
Order, to perfect and maintain such Liens, and to assure, convey, assign,
transfer and confirm unto Collateral Agent the property and rights thereby
conveyed and assigned or intended to now or hereafter be conveyed or assigned or
that any Borrower may be or may hereafter become bound to convey or to assign to
Collateral Agent or for carrying out the intention of or facilitating the
performance of the terms of this Agreement, any other Credit Documents or the
Confirmation Order, registering or recording this Agreement or any other Credit
Document. Without limiting the generality of the foregoing, Borrowers shall
deliver to Collateral Agent, promptly upon receipt thereof, all instruments
received by Borrowers after the Closing Date and take all actions and execute
all documents necessary or reasonably requested by Collateral Agent to perfect
Collateral Agent's Liens in any such instrument or any other Investment acquired
by any Borrower.
B. FILING AND RECORDING OBLIGATIONS. Each Borrower shall
jointly and severally pay all filing, registration and recording fees and all
expenses incident to the execution and acknowledgement of any Mortgage or other
Credit Document, including any instrument of further assurance described in
subsection 6.11A, and shall pay all mortgage recording taxes, transfer taxes,
general intangibles taxes and governmental stamp and other taxes, duties,
imposts, assessments and charges arising out of or in connection with the
execution, delivery, filing, recording or registration of any Mortgage or other
Credit Document, including any instrument of further assurance described in
subsection 6.11A, or by reason of its interest in, or measured by amounts
payable under, the Notes, the Mortgages or any other Credit Document, including
any instrument of further assurance described in subsection 6.11A, (excluding
income, franchise and doing business Taxes), and shall pay all stamp Taxes and
other Taxes required to be paid on any Credit Document; provided, however, that
such Borrower may contest in good faith and through appropriate proceedings, any
such Taxes, duties, imposts, assessments and charges; provided further, however,
that such Borrower shall pay all such Taxes, duties, imposts and charges when
due to the appropriate taxing authority during the pendency of any such
proceedings if required to do so to stay enforcement thereof. If any Borrower
fails to make any of the payments described in the preceding sentence within 10
days after notice thereof from Administrative Agent (or such shorter period as
is necessary to protect the loss of or diminution in value of any Collateral by
reason of tax foreclosure or otherwise, as determined by Administrative Agent)
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accompanied by documentation verifying the nature and amount of such payments,
Administrative Agent may (but shall not be obligated to) pay the amount due and
Borrowers shall jointly and severally reimburse all amounts in accordance with
the terms hereof.
C. COSTS OF DEFENDING AND UPHOLDING THE LIEN.
Administrative Agent may, upon at least five days' prior notice to Borrowers,
(i) appear in and defend any action or proceeding, in the name and on behalf of
any Agent, Lenders or any Borrower, in which any Agent or any Lender is named or
which Administrative Agent in its sole discretion determines is reasonably
likely to materially adversely affect any Mortgaged Property, any other
Collateral, any Mortgage, the Lien thereof or any other Credit Document and (ii)
institute any action or proceeding which Administrative Agent reasonably
determines should be instituted to protect the interest or rights of Agents and
Lenders in any Mortgaged Property or other Collateral or under this Agreement or
any other Credit Document. Borrowers, jointly and severally, agree that all
reasonable costs and expenses expended or otherwise incurred pursuant to this
subsection (including reasonable attorneys' fees and disbursements) by
Administrative Agent shall be paid pursuant to subsection 10.2 hereof.
6.12 HIGH YIELD NOTES.
Company shall obtain no later than three months after the
Closing Date, ratings of the High Yield Notes from S&P and/or Xxxxx'x; provided,
however, that if such ratings shall not have been obtained by such date solely
due to inaction or a refusal to act by any such rating agency that is, in either
case, beyond the control of Borrowers (as determined in the reasonable judgment
of Administrative Agent), Borrowers shall not be in breach of this subsection
6.12 so long as Borrowers shall take all steps Agents reasonably request from
time to time to obtain such ratings.
6.13 MOST FAVORED NATIONS PAYMENTS.
Company shall, and shall cause each of its Subsidiaries to,
extend any fees or pricing increases, to the extent such fees or pricing
increases are the direct obligation of Company or its Subsidiaries, resulting
from the amendment, waiver or modification, after the Closing Date, of the New
L/C Facility Documents, on an equivalent basis (based in the case of fees on the
respective amounts of Letter of Credit Exposure outstanding (on one hand) and
the credit exposure under the New L/C Facility Documents (on the other hand)) to
the Lenders regardless of whether a particular Lender has participated in or
consented to a corresponding amendment, waiver or modification (if any) of the
Credit Documents, and any such payment of equivalent fees shall be paid in cash
concurrently with the fees giving rise to such equivalent fees.
SECTION 7. BORROWERS' NEGATIVE COVENANTS
Borrowers covenant and agree that, so long as any of the
Letter of Credit Commitments hereunder shall remain in effect and until payment
in full of all Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Borrowers shall perform, and shall cause each of their Subsidiaries to perform,
all covenants in this Section 7.
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7.1 INDEBTEDNESS.
Borrowers shall not, and shall not permit their respective
Subsidiaries to, directly or indirectly, create, incur or assume, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Borrowers may become and remain liable with respect
to the Obligations and Indebtedness under the New L/C Facility
Documents, the High Yield Notes, the Tax Note and the Unsecured
Creditor Notes, and Subsidiaries of Borrowers may become and remain
liable with respect to Indebtedness under the Tax Note;
(ii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations and Performance
Guaranties permitted by subsection 7.4 and, upon any matured
obligations actually arising pursuant thereto, any Indebtedness created
as a result thereof;
(iii) Borrowers may become and remain liable with respect
to Indebtedness to any other Borrowers; provided that all such
intercompany Indebtedness shall be evidenced by the Intercompany Master
Note;
(iv) Subsidiaries of Company other than Borrowers may,
after the Closing Date, become and remain liable with respect to
Indebtedness to Company or any Subsidiary of Company so long as the
proceeds of such Indebtedness are applied to working capital, capital
expenditure, maintenance, operation, payroll and other liquidity
requirements in the ordinary course of business of the Subsidiaries
incurring such Indebtedness; provided, that (a) no such Indebtedness
may be incurred at any time that Borrowers shall not be in compliance
with subsection 7.6E, (b) no such Indebtedness may be incurred to make
capital expenditures if after giving effect to such expenditures
Borrowers would not be in pro forma compliance with subsection 7.6F,
and (c) all such intercompany Indebtedness shall be evidenced by the
Intercompany Master Note;
(v) Subsidiaries of Company may, after the Closing Date,
become and remain liable with respect to Indebtedness to Company or any
Subsidiary of Company the proceeds of which are applied to Development
Expenses; provided that Development Expenses for all Projects of
Company's Subsidiaries at any time after the Closing Date, net of any
such Development Expenses that have theretofore been reimbursed after
the Closing Date by the client of the relevant Project, shall not
exceed on any date of determination an amount equal to (a) $3,000,000
plus (b) the product of $3,000,000 multiplied by the number of Fiscal
Years that have commenced following January 31, 2004 but prior to such
date of determination; and provided further, that all such intercompany
Indebtedness shall be evidenced by the Intercompany Master Note;
(vi) Company and its Subsidiaries, as applicable, may
remain liable with respect to Indebtedness outstanding on the Closing
Date and described in Schedule 7.1(vi) annexed hereto;
(vii) Subsidiaries of Company may become and remain liable
with respect to Indebtedness to Company or any of its Subsidiaries the
proceeds of which are applied to
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make Expansions permitted under subsection 7.3(vi) or 7.3(vii);
provided that all such intercompany Indebtedness shall be evidenced by
the Intercompany Master Note;
(viii) Subsidiaries of Company may become and remain liable
with respect to Indebtedness consisting of a converted equity
Investment by Company or another Subsidiary of Company in such
Subsidiaries, provided that the underlying equity Investment was
permitted under this Agreement at the time of such conversion;
(ix) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness under (a) Capital Leases in
existence as of the Closing Date and described in Schedule 7.1(ix) and
(b) Capital Leases entered into after the Closing Date, so long as the
aggregate amount of Indebtedness outstanding at any time with respect
to Capital Leases under clause (b) of this subsection 7.1(ix) shall not
exceed $5,000,000;
(x) Company or any Subsidiary of Company may become and
remain liable with respect to Indebtedness incurred to refinance,
replace, renew or extend, in whole or in part, Indebtedness of such
Person permitted to remain outstanding under subsection 7.1(vi);
provided, that in each case (a) the terms (excluding the interest rate
and fees payable with respect thereto, so long as such interest and
fees on such Indebtedness are not borne directly or indirectly by
Company or any of its Subsidiaries, whether through an offset to or
deduction against service or operating agreement fees to Company or its
Subsidiaries or otherwise) of such Indebtedness as refinanced,
replaced, renewed or extended, taken as a whole (considering the
economic benefits and disadvantages to Company and its Subsidiaries
from such refinancing, replacement, renewal, or extension, as well as
the economic benefits and disadvantages to Company and its Subsidiaries
of the Project to which such Indebtedness relates), shall not be more
disadvantageous in any material respect to Company and its Subsidiaries
and the Lenders than the Indebtedness so refinanced, replaced, renewed
or extended, (b) the principal amount of the Indebtedness as
refinanced, replaced, renewed or extended shall not exceed 110% of the
principal amount of the Indebtedness so refinanced, replaced, renewed
or extended (provided that such limitation shall not apply with respect
to Indebtedness that an existing client (if such client is a Government
Authority) of a Project undertakes to service through the principal
lease, service or operating agreement of the applicable Project), (c)
no obligee or beneficiary of such Indebtedness after such refinancing,
replacement, renewal or extension shall have greater recourse to
Persons for the payment or collection of such Indebtedness than the
obligee or beneficiary of the Indebtedness so refinanced, replaced,
renewed or extended had immediately prior to such transaction, and (d)
Company shall provide to Agents reasonable prior advance written notice
of such proposed refinancing, replacement, renewal or extension and
copies of all material contracts or other agreements being entered into
in connection therewith;
(xi) Subsidiaries of Company that are obligated with
respect to Limited Recourse Debt on the Closing Date relating to
waste-to-energy Projects may, after the Closing Date, become and remain
liable with respect to Limited Recourse Debt relating to such
waste-to-energy Projects, so long as (a) all or substantially all the
proceeds of such Limited Recourse Debt are applied to Expansions of
such waste-to-energy Projects permitted under subsection 7.3(vii) or to
ensure compliance with applicable laws and
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regulatory requirements and (b) the incurrence by such Subsidiary of
such Limited Recourse Debt is required by the existing client (if such
client is a Government Authority) of the relevant Project and Company
shall have delivered to Agents an Officer's Certificate to the
foregoing effect; provided, that after the occurrence and during the
continuation of an Event of Default, neither Company nor any of its
Subsidiaries shall enter into a contractual commitment to incur any
such Limited Recourse Debt;
(xii) Company may become and remain liable with respect to
Indebtedness consisting solely of its obligations under Insurance
Premium Financing Arrangements, which obligations shall not exceed at
any time $30,000,000 in the aggregate;
(xiii) Borrowers may become and remain liable with respect
to Indebtedness incurred to refinance, replace, defease, renew or
extend, in whole or in part, the High Yield Notes issued on the Closing
Date; provided, that (a) the fees, interest rates and pricing terms of
such Indebtedness as refinanced, replaced, defeased, renewed or
extended, taken as a whole (considering any extension of the term of
such Indebtedness), shall not be more disadvantageous to Company and
its Subsidiaries and the Lenders (in a manner deemed material by
Agents) than the High Yield Notes so refinanced, replaced, defeased,
renewed or extended, (b) no scheduled installment of principal shall be
required on earlier dates than the maturity date of the High Yield
Notes so refinanced, replaced, defeased, renewed or extended, (c) the
other terms (including the redemption and repayment terms,
representations and warranties, covenants and events of default) of
such Indebtedness as refinanced, replaced, defeased, renewed or
extended, taken as a whole, shall not be more disadvantageous to
Company and its Subsidiaries and the Lenders (in a manner deemed
material by Agents) than the High Yield Notes so refinanced, replaced,
defeased, renewed or extended, (d) the principal amount of the
Indebtedness as refinanced, replaced, defeased, renewed or extended
shall not exceed the sum of (1) 110% of the principal amount of the
Indebtedness so refinanced, replaced, defeased, renewed or extended,
(2) interest accrued and unpaid on such principal amount immediately
prior to such refinancing, replacement, defeasance, renewal or
extension, and (3) premiums required to be paid upon such refinancing,
replacement, defeasance, renewal or extension pursuant to the
documentation for the High Yield Notes so refinanced, replaced,
defeased, renewed or extended, (e) the obligations under (and the Liens
securing) such Indebtedness as refinanced, replaced, defeased, renewed
or extended shall be subject to the Intercreditor Agreement on terms
substantively identical to the terms applicable to the High Yield Notes
refinanced, replaced, defeased, renewed or extended thereby, and (f)
Company shall provide to Agents reasonable prior advance written notice
of such proposed refinancing, replacement, defeasance, renewal or
extension and copies of all material contracts or other agreements
being entered into in connection therewith;
(xiv) Company may become and remain liable with respect to
Subordinated Indebtedness to Persons other than Company and its
Subsidiaries in an aggregate amount at any time outstanding not to
exceed $10,000,000; provided, that (a) such Indebtedness shall be
unsecured and unguarantied, (b) no cash interest or cash principal
payments shall be required on such Indebtedness until the Obligations
are paid in full, (c) the interest
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rates maturities, amortization schedules, covenants, defaults,
remedies, subordination provisions and other terms of such Indebtedness
are satisfactory to Agents and Requisite Lenders, (d) the proceeds of
such Indebtedness shall not be applied to any purpose prohibited under
this Agreement, and (e) after giving effect to the incurrence of such
Indebtedness, Borrowers shall be in pro forma compliance with
subsection 7.6B;
(xv) Bankrupt Subsidiaries may become and remain liable
under intercompany loans by Company and its Subsidiaries (other than
Bankrupt Subsidiaries) to such Bankrupt Subsidiaries to the extent such
loans are permitted under subsection 7.3(xi);
(xvi) CEA may become and remain liable with respect to
Indebtedness arising solely due to its pledge of the Capital Stock of
CPIH under the CPIH Stock Pledge Agreement;
(xvii) Company and its Subsidiaries may become and remain
liable with respect to their obligations to pay for services rendered
by DHC to them under and in accordance with the Corporate Services
Reimbursement Agreement; and
(xviii) Company and its Subsidiaries may become and remain
liable with respect to other unsecured Indebtedness in an aggregate
amount at any time outstanding not to exceed $7,500,000.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Borrowers shall not, and shall
not permit their respective Subsidiaries to, directly or indirectly, create,
incur, assume or permit to exist any Lien on or with respect to any property or
asset of any kind (including any document or instrument in respect of goods or
accounts receivable) of Borrowers or any of their respective Subsidiaries,
whether now owned or hereafter acquired, or any income or profits therefrom, or
file or authorize the filing of, or permit to remain in effect, any effective
financing statement or other similar notice of any Lien with respect to any such
property, asset, income or profits under the UCC or under any similar recording
or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents to
secure the Obligations, the obligations of Borrowers under the New L/C
Facility Documents, the obligations under the High Yield Notes and the
obligations to the cash management bank with respect to the Cash
Management System;
(iii) Liens existing on the Closing Date and described in
Schedule 7.2 annexed hereto;
(iv) Liens on assets of any Subsidiary of Company and/or
on the stock or other equity interests of such Subsidiary, in each case
to the extent such Liens secure Limited Recourse Debt of such
Subsidiary permitted by subsection 7.1(xi);
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(v) Liens on assets of Company or any Subsidiary of
Company securing refinancing Indebtedness permitted by subsection
7.1(x), provided that in each case the Liens securing such refinancing
Indebtedness shall attach only to the assets that were subject to Liens
securing the Indebtedness so refinanced and, if applicable, assets the
acquisition of which was financed with the proceeds of such refinancing
Indebtedness permitted by subsection 7.1(x);
(vi) Liens securing debt service reserve funds, completion
obligations and similar accounts and obligations (other than
Indebtedness) of Subsidiaries of Company to Persons other than Company
and its Subsidiaries and their respective Affiliates, so long as (a)
each such obligation is associated with a Project, (b) such Lien is
limited to (1) assets associated with such Project (which in any event
shall not include assets held by any Borrower other than a Borrower
whose sole business is the ownership and/or operation of such Project
and substantially all of whose assets are associated with such Project)
and/or (2) the equity interests in such Subsidiary, but in the case of
clause (2) only if such Subsidiary's sole business is the ownership
and/or operation of such Project and substantially all of such
Subsidiary's assets are associated with such Project, and (c) such
obligation is otherwise permitted under this Agreement;
(vii) Liens on cash collateral of Subsidiaries of Company
securing Contingent Obligations permitted under subsection 7.4(ix), so
long as such cash is provided from funds that would not otherwise be
available (due to prohibitions in the underlying agreements relating to
Projects) for making dividends and distributions to Company and its
other Subsidiaries;
(viii) Liens on cash collateral of Subsidiaries of Company
securing Contingent Obligations permitted under subsection 7.4(x), so
long as such cash is provided from funds that would not otherwise be
available (due to prohibitions in the underlying agreements relating to
Projects) for making dividends and distributions to Company and its
other Subsidiaries;
(ix) Liens on cash collateral of Company and its
Subsidiaries securing Contingent Obligations permitted under subsection
7.4(xi);
(x) Liens created pursuant to Insurance Premium Financing
Arrangements otherwise permitted under this Agreement, so long as such
Liens attach only to gross unearned premiums for the insurance
policies;
(xi) Liens on cash collateral of Company securing
insurance deductibles or self-insurance retentions required by third
party insurers in connection with insurance arrangements entered into
by Company and its Subsidiaries with such insurers in compliance with
subsection 6.4B;
(xii) Liens on all or substantially all of the assets of
the Bankrupt Subsidiaries to the extent such Liens secure the
obligations of such Bankrupt Subsidiaries under loans made to them and
permitted under subsection 7.3(xi);
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(xiii) Liens securing Indebtedness permitted under
subsection 7.1(ix)(b), so long as such Liens extend only to the assets
subject to the relevant Capital Lease;
(xiv) Liens on the Capital Stock of CPIH pledged by CEA
under the CPIH Stock Pledge Agreement; and
(xv) Other Liens on assets of any Subsidiary of Company
securing Indebtedness in an aggregate amount not exceeding $2,500,000.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If any Borrowers
or any of its Subsidiaries shall create or assume any Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other than Liens
excepted by the provisions of subsection 7.2A and Liens created or assumed on
properties or assets on which First Priority Liens created under the Collateral
Documents are attached and perfected at the time of such creation or assumption,
the Borrowers hereby agree that (i) they will be deemed to have automatically
and without further action secured the Obligations with such Lien equally and
ratably with any and all other Indebtedness, Contingent Obligations or any other
obligations or debt (as defined in the Bankruptcy Code) secured thereby, and
(ii) they shall take or cause to be taken such actions as Agents or Requisite
Lenders deem necessary or advisable to evidence such equal and ratable Lien;
provided that, notwithstanding the foregoing, this covenant shall not be
construed as a consent by Requisite Lenders to the creation or assumption of any
such Lien not permitted by the provisions of subsection 7.2A, and the creation
or assumption of any such Lien not permitted by the provisions of subsection
7.2A shall constitute an Event of Default.
C. NO FURTHER NEGATIVE PLEDGES. Neither Company nor any
of its Subsidiaries shall enter into any agreement (other than this Agreement,
the Credit Documents, the New L/C Facility Documents and the High Yield
Indenture) on or after the Closing Date prohibiting the creation or assumption
of any Lien upon any of its properties or assets, whether now owned or hereafter
acquired, except with respect to (i) specific property encumbered by a Lien
permitted hereunder to secure payment of particular Indebtedness permitted to be
incurred under subsection 7.1(vii), 7.1(x) (but only to the extent that the
Indebtedness being refinanced was subject to a negative pledge on the same
assets), 7.1(xi), or 7.1(xii), or by a Lien permitted under subsection 7.2A(vi),
7.2A(vii), 7.2A(viii), 7.2A(ix), 7.2A(xi), 7.2A(xii) or 7.2A(xiv), or by a Lien
permitted under subsection 7.2A(xv) to the extent such Lien secures obligations
permitted hereunder that are incurred to finance the acquisition of such
specific property, (ii) specific property to be sold pursuant to an executed
agreement with respect to an Asset Sale which is permitted hereunder, (iii)
specific property that is leased pursuant to a lease permitted hereunder, (iv)
provisions in the principal lease, service and operating agreements pertaining
to Projects or the partnership and financing agreements relating to Projects, so
long as in each case such lease, service, operating, partnership or financing
agreement is an extension, renewal or replacement of such agreement in effect as
of the Closing Date, is otherwise permitted to be entered into hereunder and
contains no more restrictive provisions relating to prohibiting the creation or
assumption of any Lien upon the properties or assets of the relevant Subsidiary
than the lease, service, operating, partnership or financing agreement so
extended, renewed or replaced, and (v) provisions contained in any New L/C
Facility Agreement described in and permitted under clause (ii) of the
definition of New L/C Facility Agreement.
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D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO
COMPANY OR OTHER SUBSIDIARIES. Company will not, and will not permit any of its
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (i) pay dividends or make any other distributions on
any of such Subsidiary's capital stock owned by Company or any other Subsidiary
of Company, (ii) repay or prepay any Indebtedness owed by such Subsidiary to
Company or any other Subsidiary of Company, (iii) make loans or advances to
Company or any other Subsidiary of Company, or (iv) transfer any of its property
or assets to Company or any other Subsidiary of Company, except (a) as provided
in this Agreement or the other Credit Documents, (b) those encumbrances or
restrictions applicable to Subsidiaries of Company to the extent created under
documentation in existence on the Closing Date, under the New L/C Facility
Documents or under the High Yield Indenture, (c) as may be provided in an
executed agreement with respect to an Asset Sale which is permitted hereunder,
and (d) provisions in the principal lease, service or operating agreements,
partnership agreements and financing agreements pertaining to Projects, so long
as such lease, service or operating agreements, partnership agreements and
financing agreements are extensions, renewals or replacements of such agreements
in effect as of the Closing Date, are otherwise permitted to be entered into
hereunder and in each case contain no more restrictive provisions relating to
the ability of the relevant Subsidiary to take the actions described in clauses
(i) through (iv) than the agreement so extended, renewed or replaced.
7.3 INVESTMENTS; ACQUISITIONS.
Borrowers shall not, and shall not permit their respective
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, or acquire, by purchase or otherwise, all
or substantially all the business, property or fixed assets of, or capital stock
or other ownership interest of any Person, or any division or line of business
of any Person except:
(i) Company and its Subsidiaries may make and own
Investments in Domestic Cash Equivalents and in such investments as are
permitted or imposed under the terms of any cash collateral or debt
service reserve agreement (including pursuant to the terms of any
Project bond indenture) permitted hereunder;
(ii) Borrowers may make and own additional equity
Investments in other Borrowers, so long as no such Investment shall be
made by one Borrower in another Borrower if (a) the latter is subject
to restrictions of the type described in subsection 7.2D more adverse
than restrictions of such type that are applicable to the Borrower
making such Investment, or (b) such Investment shall result in the
obligee or beneficiary of any Indebtedness or Contingent Obligation
(other than the Obligations) having greater recourse to assets for the
payment or collection of such Indebtedness or Contingent Obligation
than such obligee or beneficiary had immediately prior to such
Investment; and Subsidiaries that are not Borrowers may make and own
additional equity Investments in Borrowers other than Company, so long
as no such Investment shall be made if (a) the applicable Subsidiary is
subject to restrictions of the type described in subsection 7.2D more
adverse than restrictions of such type that are applicable to the
applicable Borrower, (b) such Investment shall result in the obligee or
beneficiary of any Indebtedness or
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Contingent Obligation (other than the Obligations) of such Subsidiary
having greater recourse to assets for the payment or collection of such
Indebtedness or Contingent Obligation than such obligee or beneficiary
had immediately prior to such Investment, or (c) such Investment shall
have any adverse effect on the Collateral for the Obligations;
(iii) Company and its Subsidiaries may make intercompany
loans to the extent permitted under subsections 7.1(iii) and 7.1(vii);
(iv) Company and its Subsidiaries may make Consolidated
Facilities Capital Expenditures permitted by subsection 7.6;
(v) Company and its Subsidiaries may continue to own the
Investments owned by them on the Closing Date and described in Schedule
7.3(v) annexed hereto;
(vi) Company and its Subsidiaries may make Expansions
which Company and its Subsidiaries are committed as of the Closing Date
to make in those waste-to-energy Projects set forth in Schedule 7.3(vi)
annexed hereto; provided that each such Investment (or commitment to
make the same) made in connection with such Projects shall be of a type
described on such Schedule and shall be in an amount not exceeding the
amount set forth on such Schedule;
(vii) Company and its Subsidiaries may make Expansions (and
may enter into contractual commitments to make such Investments) with
respect to existing waste-to-energy Projects to the extent such
Expansions are publicly financed, so long as (a) Company shall provide
to Agents reasonable prior advance written notice of each such
Investment and Expansion and copies of all material contracts or other
agreements being entered into in connection with such Investment and
Expansion, (b) such Expansion is not otherwise prohibited under this
Agreement, (c) such Expansions are required by the existing client (if
such client is a Government Authority) of the relevant Project and the
amounts required therefor are advanced to Company and its Subsidiaries
or paid directly by such client, and (d) such Investment (or such
contractual commitment, as the case may be) shall not breach any other
provision of this Agreement; provided, that after the occurrence and
during the continuation of an Event of Default, neither Company nor any
of its Subsidiaries shall enter into a contractual commitment for any
such Investment;
(viii) Company and its Subsidiaries may, after the Closing
Date, make and own Investments in any other Subsidiary of Company (to
the extent in existence on the Closing Date) the proceeds of which are
applied to working capital, maintenance, operation, payroll and other
liquidity requirements in the ordinary course of business of
Subsidiaries other than Borrowers; provided, that no such Investment
may be made at any time that Borrowers shall not be in compliance with
subsection 7.6E;
(ix) Company and its Subsidiaries may, after the Closing
Date, make and own Investments in any other Subsidiary of Company (to
the extent in existence on the Closing Date) the proceeds of which are
applied to Development Expenses; provided that Development Expenses for
all Projects of Company's Subsidiaries at any time after the
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Closing Date, net of any such Development Expenses that have
theretofore been reimbursed after the Closing Date by the client of the
relevant Project, shall not exceed on any date of determination an
amount equal to (a) $3,000,000 plus (b) the product of $3,000,000
multiplied by the number of Fiscal Years that have commenced following
January 31, 2004 but prior to such date of determination;
(x) Borrowers and their Subsidiaries may own Investments
in the form of non-cash consideration received in connection with (a)
Asset Sales permitted under subsection 7.7(iii) or 7.7(iv) or (b)
settlements of disputes, to the extent such settlements occur in the
ordinary course of business;
(xi) Company and its Subsidiaries may make Investments
after the Closing Date consisting of intercompany loans to the Bankrupt
Subsidiaries, so long as (a) the proceeds of such loans are applied to
working capital, maintenance, operation, payroll and other liquidity
requirements in the ordinary course of business of such Bankrupt
Subsidiaries, (b) the aggregate amount of such intercompany loans
outstanding to the Bankrupt Subsidiaries at any time shall not exceed
$2,000,000, (c) such loans shall have, pursuant to an order of the
Bankruptcy Court in form and substance satisfactory to Agents, no less
favorable payment priority and lien priority than the payment priority
and lien priority of such Bankrupt Subsidiaries' obligations under the
DIP Credit Agreement immediately prior to the Closing Date, and shall
be secured by substantially the same assets of such Bankrupt Subsidiary
as such obligations under the DIP Credit Agreement immediately prior to
the Closing Date, and (d) such loans shall be evidenced by promissory
notes that shall be pledged to secure the Obligations;
(xii) Borrowers may make payments to the extent
contractually obligated pursuant to the terms of the Existing IPP
International Project Guaranties;
(xiii) Subject to the Intercreditor Agreement, Borrowers may
reimburse drawings made under letters of credit issued under the New
L/C Facility Agreement that support obligations with respect to the IPP
International Business; and
(xiv) CEA may make payments on account of Indebtedness of
CPIH to the extent such payments are made solely from the proceeds of
sales of Capital Stock of CPIH.
7.4 CONTINGENT OBLIGATIONS; PERFORMANCE GUARANTIES.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation or Performance Guaranty, and shall not
create or become or remain liable with respect to any obligation to incur a
subsequent Contingent Obligation or to post cash collateral to secure any
obligation, except:
(i) Borrowers may become and remain liable (a) with
respect to Contingent Obligations in respect of the Obligations and
under the Credit Documents, (b) with respect to Contingent Obligations
under guarantees of the High Yield Notes, and (c) with
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respect to Contingent Obligations under the New L/C Facility Documents
and the CPIH Stock Pledge Agreement;
(ii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of Letters of
Credit;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of customary
and appropriate indemnification and purchase price adjustment
obligations incurred in connection with Asset Sales or other sales of
assets to the extent such Asset Sales and sales are permitted under
this Agreement;
(iv) Company and its Subsidiaries may become and remain
liable with respect to (a) Performance Guaranties in existence on the
Closing Date and described on Schedule 7.4(iv) annexed hereto, (b)
Performance Guaranties replacing, renewing or extending Performance
Guaranties described in clause (a), and (c) Performance Guaranties
entered into in connection with a Bankrupt Subsidiary ceasing to be a
Bankrupt Subsidiary, for the purpose of replacing a Performance
Guaranty relating to such Bankrupt Subsidiary that was in effect
immediately prior to the Closing Date but was terminated on the Closing
Date, so long as no Persons enter into any such replacement Performance
Guaranty as obligors other than the obligors under the Performance
Guaranty being so replaced; provided that no such replacement, renewed
or extended Performance Guaranty referred to in clause (b) or (c) (x)
taken as a whole (considering the economic benefits and disadvantages
to Company and its Subsidiaries from such replacement, renewal or
extension, as well as the economic benefits and disadvantages to
Company and its Subsidiaries of the Project to which such Performance
Guaranty relates), shall be more disadvantageous in any material
respect to Company and its Subsidiaries than the Performance Guaranty
so replaced, renewed or extended or (y) shall be secured or guarantied;
(v) Company and its Subsidiaries may become and remain
liable with respect to Performance Guaranties or Contingent Obligations
supporting Expansions of waste-to-energy Projects permitted pursuant to
subsection 7.3(vii), provided that (a) the terms of any such
Performance Guaranty or Contingent Obligation shall be generally
consistent with past practice of Company and its Subsidiaries, (b) in
no event shall any such Performance Guaranty or Contingent Obligation
be secured by collateral, (c) no Borrower or Subsidiary other than a
Person already liable under a substantially similar Contingent
Obligation with respect to such Project shall become liable under any
such Contingent Obligation, (d) no Borrower or Subsidiary other than a
Person already liable under a substantially similar Performance
Guaranty with respect to such Project shall become liable under any
such Performance Guaranty, and (e) after the occurrence and during the
continuation of an Event of Default, neither Company nor any if its
Subsidiaries shall enter into any such Performance Guaranty or
Contingent Obligation or enter into a contractual commitment to provide
any such Performance Guaranty or Contingent Obligation;
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(vi) Company and its Subsidiaries, as applicable, may
become and remain liable with respect to (a) Contingent Obligations
(other than the Existing IPP International Project Guaranties) in
existence on the Closing Date and described in Schedule 7.4(vi) annexed
hereto, and (b) Contingent Obligations replacing, renewing or extending
Contingent Obligations described in clause (a); provided that no such
replacement, renewed or extended Contingent Obligation, taken as a
whole, shall be more disadvantageous in any material respect to Company
and its Subsidiaries than the Contingent Obligations so replaced,
renewed or extended;
(vii) Company and its Subsidiaries may become and remain
liable with respect to usual and customary Contingent Obligations
incurred in connection with arrangements made with third parties to
obtain surety bonds, bid bonds and other similar security required to
be delivered or posted in connection with (i) additions or improvements
to existing facilities to increase the capacity, efficiency,
performance or profitability of the applicable Project, so long as such
additions or improvements are not Expansions, are required pursuant to
binding Contractual Obligations of Company or its Subsidiaries and are
in compliance with subsection 7.6F, and (ii) Expansions of existing
Projects, to the extent such Expansions are otherwise permitted under
subsection 7.3(vii) and the other provisions of this Agreement;
(viii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations which Company and its
Subsidiaries are contractually committed as of the Closing Date to
incur with respect to those Projects set forth on Schedule 7.3(vi)
annexed hereto; provided that each such Contingent Obligation (or
commitment to incur the same) incurred in connection with such Projects
shall be of a type described on such Schedule and shall be in an amount
not exceeding the amount set forth on such Schedule;
(ix) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations consisting of long-term
or forward purchase contracts and option contracts to buy, sell or
exchange commodities and similar agreements or arrangements, so long as
such contracts, agreements or arrangements do not constitute
Commodities Agreements;
(x) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations constituting Hedge
Agreements;
(xi) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations incurred in exchange (or
in consideration) for (a) the release of cash collateral pledged by
Company or its Subsidiaries or (b) the return and cancellation of
undrawn letters of credit for which Company or its Subsidiaries are
liable for reimbursement; provided that in each case the maximum amount
of the Contingent Obligations so incurred shall not exceed 110% of the
amount of cash collateral released or the face amount of the letters of
credit returned and cancelled, as the case may be;
(xii) Company and its Subsidiaries may become and remain
liable with respect to usual and customary Contingent Obligations
incurred in connection with insurance
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deductibles or self-insurance retentions required by third party
insurers in connection with insurance arrangements entered into by
Company and its Subsidiaries with such insurers in compliance with
subsection 6.4B; and
(xiii) Company and its Subsidiaries, as applicable, may
remain liable with respect to the Existing IPP International Project
Guaranties, as such guaranties are in effect on the Closing Date.
7.5 RESTRICTED PAYMENTS.
Borrowers shall not, and shall not permit their respective
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Payment; provided, however, that (i) so long as no
Event of Default shall have occurred and be continuing, Borrowers may make
regularly scheduled payments of principal and interest in respect of any
Subordinated Indebtedness (other than the Tax Note) in accordance with the terms
of, and only to the extent required by, and subject to the subordination
provisions contained in, the indenture or other agreement pursuant to which such
Subordinated Indebtedness was issued, as such indenture or other agreement may
be amended from time to time to the extent permitted under subsection 7.12,
provided that so long as Borrowers may elect to pay all or any portion of such
interest in kind rather than in cash, Borrowers shall elect to pay in kind the
maximum portion of such interest with respect to which Borrowers can make such
election; (ii) Company and its Subsidiaries may make payments of principal,
interest and other amounts in respect of the Tax Note and Indebtedness permitted
under subsections 7.1(vi), 7.1(ix), 7.1(x), 7.1(xi), 7.1(xii), 7.1(xiv), 7.1(xv)
and 7.1(xviii), in accordance with the terms of, and only to the extent required
by, the Tax Note or the indentures or other agreements pursuant to which such
Indebtedness was issued, as the case may be, as such Tax Note, indentures or
other agreements may be amended from time to time to the extent permitted
hereunder, provided, however, that during the continuance of an Event of
Default, notwithstanding anything to the contrary in this Agreement, neither
Company nor any Subsidiary shall fund, contribute or otherwise advance amounts
for payment of Indebtedness permitted under subsections 7.1(vi), 7.1(x) and
7.1(xi) related to Projects unless it has an irrevocable Contractual Obligation
to make such payments; (iii) so long as no Event of Default shall have occurred
and be continuing, Subsidiaries of Company may, at the time Indebtedness is
refinanced or replaced as permitted under subsection 7.1 by other Indebtedness
permitted under such subsection, pay principal, accrued interest and other
amounts owing on such refinanced Indebtedness at such time, provided that such
payments may be made with respect to Limited Recourse Debt during the
continuance of an Event of Default so long as such payments are from the
proceeds of Limited Recourse Debt permitted to be incurred hereunder and such
proceeds are required to be applied to make such payments under a binding
Contractual Obligation to a third party; (iv) Company and its Subsidiaries may
pay any fees required to be paid to the Agents and Lenders hereunder; (v) so
long as no failure to pay any amount when due shall have occurred and be
continuing under this Agreement, Company may make payments to DHC to the extent
required under the Corporate Services Reimbursement Agreement; (vi) Company and
its Subsidiaries may make payments required under the DHC Tax Sharing Agreement;
(vii) Company and its Subsidiaries may make payments to Persons in accordance
with the Approved Plan of Reorganization to the extent such payments are made
from funds held in reserves established pursuant to the Approved Plan of
Reorganization, provided, that Borrowers shall not, and shall not permit their
respective Subsidiaries to, deposit
105
any amounts in such reserves in excess of the amounts established prior to the
Closing Date pursuant to the Approved Plan of Reorganization; and (viii) Company
and its Subsidiaries may apply cash in an amount not exceeding, in the
aggregate, 105% of the stated amount of the Greenway L/C to cash collateralize
or otherwise support the Greenway L/C as contemplated under subsection
4.1F(i)(d) and/or to reimburse drawings thereunder.
In addition, in any case where a Borrower or Subsidiary is a
Joint Venture, Borrowers shall not, and shall not permit their respective
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for (a) any dividend or other distribution, direct or indirect, on
account of any shares of Capital Stock of such Joint Venture held by Persons
other than Borrowers or any Subsidiaries of Borrowers, except a dividend payable
solely in shares of that class of stock to the holders of that class, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of Capital Stock of
such Joint Venture held by Persons other than Borrowers or any Subsidiaries of
Borrowers, or (c) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of Capital Stock
of such Joint Venture held by Persons other than Borrowers or any Subsidiaries
of Borrowers, except in each case to the extent the relevant action described in
clause (a), (b) or (c) is required pursuant to a binding Contractual Obligation
in effect as of the Closing Date or pursuant to an extension, renewal or
replacement of such a Contractual Obligation so long as such extension, renewal
or replacement is otherwise permitted to be entered into hereunder and contains
provisions no less favorable to Company and its Subsidiaries than the relevant
Contractual Obligations so extended, renewed or replaced.
7.6 FINANCIAL COVENANTS.
A. MINIMUM INTEREST COVERAGE RATIO. Company shall not
permit the ratio of (i) Adjusted EBITDA to (ii) Consolidated Cash Interest
Expense, in each case for any four-Fiscal Quarter period ending at the end of
any Fiscal Quarter set forth below, to be less than the correlative ratio
indicated:
MINIMUM INTEREST
FISCAL QUARTER COVERAGE RATIO
-------------- --------------
FQ2 2004 1.15:1.00
FQ3 2004 1.15:1.00
FQ4 2004 1.15:1.00
FQ1 2005 1.15:1.00
FQ2 2005 1.20:1.00
FQ3 2005 1.20:1.00
FQ4 2005 1.25:1.00
FQ1 2006 1.25:1.00
FQ2 2006 1.30:1.00
FQ3 2006 1.30:1.00
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FQ4 2006 1.30:1.00
FQ1 2007 1.30:1.00
FQ2 2007 1.35:1.00
FQ3 2007 1.35:1.00
FQ4 2007 1.35:1.00
FQ1 2008 1.35:1.00
FQ2 2008 1.40:1.00
FQ3 2008 1.40:1.00
FQ4 2008 and thereafter 1.40:1.00
B. MAXIMUM CONSOLIDATED LEVERAGE RATIO. Company shall
not permit the Consolidated Leverage Ratio as at any date on or after the end of
the most recently ended Fiscal Quarter set forth in the table below to exceed
the correlative ratio indicated:
MAXIMUM CONSOLIDATED
FISCAL QUARTER LEVERAGE RATIO
-------------- --------------
FQ2 2004 7.00:1.00
FQ3 2004 7.00:1.00
FQ4 2004 7.00:1.00
FQ1 2005 7.00:1.00
FQ2 2005 6.75:1.00
FQ3 2005 6.75:1.00
FQ4 2005 6.50:1.00
FQ1 2006 6.50:1.00
FQ2 2006 6.25:1.00
FQ3 2006 6.25:1.00
FQ4 2006 6.25:1.00
FQ1 2007 6.25:1.00
FQ2 2007 6.00:1.00
FQ3 2007 6.00:1.00
FQ4 2007 6.00:1.00
FQ1 2008 6.00:1.00
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FQ2 2008 5.75:1.00
FQ3 2008 5.75:1.00
FQ4 2008 and thereafter 5.75:1.00
C. MINIMUM CONSOLIDATED NET WORTH. Company shall not
permit Consolidated Net Worth on any date of determination after the Closing
Date to be less than (i) Consolidated Net Worth as of the Closing Date, if such
date of determination occurs during 2004, or (ii) the sum of (a) Consolidated
Net Worth as of the Closing Date plus (b) the product of $7,000,000 multiplied
by the number of Fiscal Quarters that have ended after December 31, 2004 but
prior to such date of determination, if such date of determination occurs after
2004.
D. MINIMUM ADJUSTED EBITDA. Company shall not permit
Adjusted EBITDA for any four-Fiscal Quarter period ending at the end of any
Fiscal Quarter set forth below to be less than the correlative amount indicated:
MINIMUM ADJUSTED
FISCAL QUARTER EBITDA
-------------- ------
FQ2 2004 $40,000,000
FQ3 2004 $40,000,000
FQ4 2004 $40,000,000
FQ1 2005 $40,000,000
FQ2 2005 $40,000,000
FQ3 2005 $40,000,000
FQ4 2005 $45,000,000
FQ1 2006 $45,000,000
FQ2 2006 $45,000,000
FQ3 2006 $45,000,000
FQ4 2006 $45,000,000
FQ1 2007 $45,000,000
FQ2 2007 $45,000,000
FQ3 2007 $45,000,000
FQ4 2007 $45,000,000
FQ1 2008 $45,000,000
FQ2 2008 $45,000,000
FQ3 2008 $45,000,000
FQ4 2008 and thereafter $45,000,000
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E. MINIMUM NON-BORROWER CASH FLOW. Company shall not
permit Non-Borrower Cash Flow for any four-Fiscal Quarter period ending at the
end of any Fiscal Quarter, to be less than zero.
F. MAXIMUM CONSOLIDATED FACILITIES CAPITAL EXPENDITURES.
Borrowers shall not, and shall not permit their respective Subsidiaries to, make
or incur Consolidated Facilities Capital Expenditures during any Fiscal Year in
excess of the Maximum Consolidated Facilities Capital Expenditures Amount for
such Fiscal Year. For purposes of this subsection 7.6F, the "MAXIMUM
CONSOLIDATED FACILITIES CAPITAL EXPENDITURES AMOUNT" for Fiscal Year 2004 shall
equal $25,000,000 and for each Fiscal Year thereafter shall equal $20,000,000;
provided, however, that the Maximum Consolidated Facilities Capital Expenditures
Amount for any Fiscal Year after 2004 shall be increased by an amount equal to
25% of the excess, if any, of the Maximum Consolidated Facilities Capital
Expenditures Amount for the previous Fiscal Year (prior to giving effect to this
proviso) over the actual amount of Consolidated Facilities Capital Expenditures
made or incurred during such previous Fiscal Year; and provided further,
however, that Company may elect by written notice to Agents to increase the
Maximum Consolidated Facilities Capital Expenditures Amount for any Fiscal Year
by an amount not more than $5,000,000 by decreasing the Maximum Consolidated
Facilities Capital Expenditures Amount for the subsequent Fiscal Year by an
amount equal to the amount of such increase.
G. CERTAIN CALCULATIONS. Notwithstanding any provision
of this Agreement to the contrary, (i) for purposes of calculating Adjusted
EBITDA for any four-Fiscal Quarter period ending prior to the first Fiscal
Quarter of 2005, Adjusted EBITDA for the third and fourth Fiscal Quarters of
2003 and the first Fiscal Quarter of 2004 shall be deemed to be equal to the
correlative amounts set forth opposite such Fiscal Quarters on Schedule 7.6G
annexed hereto; (ii) for purposes of determining compliance with subsection 7.6A
for any four-Fiscal Quarter period ending prior to the last Fiscal Quarter of
2004, Consolidated Cash Interest Expense shall equal the product of (a) actual
Consolidated Cash Interest Expense during the period from the Closing Date to
the end of such four-Fiscal Quarter period multiplied by (b) the ratio of (1)
365 divided by (2) the number of days in such period; and (iii) for purposes of
determining compliance with each of the covenants in this subsection 7.6, each
of Adjusted EBITDA, Consolidated Cash Interest Expense, Consolidated Net Worth,
Non-Borrower Cash Flow and Consolidated Facilities Capital Expenditures shall
not include any portion thereof attributable to the results of operations or
financial position, as the case may be, of CPIH Subsidiaries for the relevant
period or as of the relevant date of determination.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES.
Borrowers shall not, and shall not permit their respective
Subsidiaries to, alter the legal form of organization of Company or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),
transfer or otherwise dispose of (including by discount or compromise), in one
transaction or a series of transactions,
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all or any part of its business, property or assets (including its notes or
receivables and Capital Stock of a Subsidiary, whether newly issued or
outstanding) or its interests in or claims against any Project, in each case
whether now owned or hereafter acquired, except:
(i) any Borrower may be merged with or into a Borrower,
or be liquidated, wound up or dissolved, or all or any part of its
business, property or assets may be conveyed, sold, leased, transferred
or otherwise disposed of, in one transaction or a series of
transactions, to a Borrower; provided that, no such transaction shall
result in the obligee or beneficiary of any Indebtedness or Contingent
Obligation (other than the Obligations) having greater recourse to
assets or Persons for the payment or collection of such Indebtedness or
Contingent Obligation than such obligee or beneficiary had immediately
prior to such transaction;
(ii) (a) any Subsidiary of Company that is not a Borrower
may be merged with or into any other Subsidiary of Company that is not
a Borrower, or be liquidated, wound up or dissolved, or all or any part
of its business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions, to another Subsidiary that is not a Borrower, provided,
that no such transaction shall result in the obligee or beneficiary of
any Indebtedness or Contingent Obligation (other than the Obligations)
having greater recourse to assets or Persons for the payment or
collection of such Indebtedness or Contingent Obligation than such
obligee or beneficiary had immediately prior to such transaction; and
(b) any Immaterial Foreign Subsidiary may be merged with or into any
Borrower, or be liquidated, wound up or dissolved, or all or any part
of its business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions, to a Borrower, provided, that (1) no such transaction
shall result in the obligee or beneficiary of any Indebtedness or
Contingent Obligation (other than the Obligations) of such Immaterial
Foreign Subsidiary having greater recourse to assets or Persons for the
payment or collection of such Indebtedness or Contingent Obligation
than such obligee or beneficiary had immediately prior to such
transaction and (2) the relevant Borrower shall be a surviving entity
in any such transaction;
(iii) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof; and
(iv) Company and its Subsidiaries may make Asset Sales,
provided that (a) the consideration received for such assets shall be
in an amount at least equal to the fair market value thereof; (b) not
less than 90% of the consideration received (other than any
consideration consisting of the assumption of liabilities related to
such assets) in any such Asset Sale shall be cash (it being agreed that
cash the receipt of which may by the relevant terms of such Asset Sale
be deferred more than six months after the date of consummation of such
Asset Sale shall not be considered cash for purposes of this clause
(b)); (c) not more than 10% of the cash consideration received by
Company and its Subsidiaries in any such Asset Sale shall be received
after the date of consummation of such Asset Sale; (d) any Indebtedness
in relation to the assets sold in any such Asset Sale shall be repaid
and the related letters of credit shall be cancelled and returned to
the
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issuers thereof; (e) the Net Asset Sale Proceeds of such Asset Sales
shall be applied as Mandatory Payments to the extent required under
subsection 2.3A; and (f) in the event that the Net Asset Sale Proceeds
from any Asset Sale, when added to the aggregate Net Asset Sale
Proceeds from all other Asset Sales after the Closing Date, would
exceed $10,000,000, Company and its Subsidiaries shall not be permitted
to consummate such Asset Sale without the prior written consent of
Requisite Lenders.
7.8 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any holder of 5% or more of any class of
equity Securities of Company or with any Affiliate of Company or of any such
holder, on terms that are less favorable to Company or that Subsidiary, as the
case may be, than those that might be obtained at the time from Persons who are
not such a holder or Affiliate; provided that the foregoing restriction shall
not apply to (i) any Indebtedness permitted under subsection 7.1 among Company
and its Subsidiaries or among Subsidiaries of Company, (ii) reasonable and
customary salaries and fees paid to current officers and members of the
Governing Bodies of Company and its Subsidiaries, provided that such salary and
fee arrangements are entered into at arms' length and on terms that are no less
favorable to Company or that Subsidiary, as the case may be, than those that
would have been obtained at the relevant time from Persons who are not such a
holder or Affiliate, (iii) reasonable and customary indemnifications and
insurance arrangements for the benefit of Persons that are officers or members
of the Governing Bodies of Company and its Subsidiaries on or after the Closing
Date, whether such Persons are current or former officers or members at the time
such indemnifications or arrangements are entered into, provided that such
indemnifications and arrangements are entered into at arms' length and on terms
that are no less favorable to Company or that Subsidiary, as the case may be,
than those that would have been obtained at the relevant time from Persons who
are not such a holder or Affiliate, (iv) any employment agreements or benefits
arrangements entered into on or after the Closing Date by Company and its
Subsidiaries with employees at arms' length and on terms that are no less
favorable to Company or that Subsidiary, as the case may be, than those that
would have been obtained at the relevant time from Persons who are not such a
holder or Affiliate, (v) payments (and other transactions) made in accordance
with the terms of the Management Services and Reimbursement Agreement, the DHC
Tax Sharing Agreement, the Corporate Services Reimbursement Agreement and the
other Related Agreements, (vi) transactions occurring on the Closing Date and
described on Schedule 7.8 annexed hereto, and (vii) the payment of reasonable
legal fees and expenses incurred by law firms in which Directors of Company are
affiliated for services rendered to Company and its Subsidiaries.
7.9 RESTRICTION ON LEASES.
Borrowers shall not, and shall not permit any of their
Subsidiaries to, become liable in any way, whether directly by assignment or as
a guarantor or other surety, for the obligations of the lessee under any lease
for equipment (other than intercompany leases between Borrowers), unless,
immediately after giving effect to the incurrence of liability with respect to
such lease, the aggregate amount of all rents paid or payable by Company and its
Subsidiaries on
111
a consolidated basis under all such leases entered into after the Closing Date
at the time in effect during the then current Fiscal Year or any future period
of 12 consecutive calendar months shall not exceed $3,000,000; provided,
however, that this subsection 7.9 shall not prohibit Company or its Subsidiaries
from incurring obligations pursuant to the renewal, extension or replacement of
leases in effect at the Closing Date so long as such leases as renewed, extended
or replaced are not more disadvantageous in any material respect to Company and
its Subsidiaries and the Lenders than the leases so renewed, extended or
replaced.
7.10 DETROIT PROJECT COVENANTS
Company shall not, and shall not permit any of its
Subsidiaries to, enter into any Contractual Obligation after the Closing Date
that would (i) grant a right to any Person or Persons to consent to or approve a
sale or other disposition of all or any portion of the Detroit Project or the
Capital Stock of the Detroit Project Subsidiary, (ii) be breached by a sale or
other disposition of all or any portion of the Detroit Project or the Capital
Stock of the Detroit Project Subsidiary if the consent or approval of any Person
or Persons (other than Requisite Lenders) is not obtained, (iii) create any
additional restriction not in existence as of the Closing Date limiting the
ability of Company and its Subsidiaries to sell or dispose of all or any portion
of the Detroit Project or the Capital Stock of the Detroit Project Subsidiary,
or (iv) purport to restrict the ability of Company and its Subsidiaries to fund
the operations of the Detroit Project after a default under the terms of such
Contractual Obligation.
7.11 CONDUCT OF BUSINESS
From and after the Closing Date, Company shall not, and shall
not permit any of its Subsidiaries, to engage in any business other than the
energy, water and waste management businesses of the type in which they are
engaged on the Closing Date and other activities to the extent incidental or
reasonably related to such businesses.
7.12 AMENDMENTS TO RELATED AGREEMENTS, DEBT DOCUMENTATION AND
ORGANIZATIONAL DOCUMENTS.
Company shall not, and shall not permit any of its
Subsidiaries to, amend, restate, modify or waive (or make any payment consistent
with an amendment, restatement, modification or waiver of) any material
provision of (i) the Management Services and Reimbursement Agreement or the
other Related Agreements (other than the New L/C Facility Documents), in each
case if the effect of such amendment, restatement, modification or waiver,
together with all other amendments, restatements, modifications or waivers made,
(a) except as otherwise permitted under subsection 7.1(xiii), is to impose
additional material obligations on, or confer material additional rights to the
holders thereof (or to other obligees with respect thereto) against, Company or
any of its Subsidiaries, or (b) is otherwise adverse to the interests of the
Lenders in a manner deemed material in the judgment of Agents or Requisite
Lenders so notifying Agents or Company; (ii) the Organizational Documents of
Company and its Subsidiaries, if the effect of such amendment, restatement,
modification or waiver, together with all other amendments, restatements,
modifications or waivers made, is adverse to the interests of the Lenders in a
manner deemed material in the judgment of Agents or Requisite Lenders; (iii) the
Subordinated Indebtedness, if the effect thereof would be to (a) change to
earlier dates the dates on which any
112
payments of principal or interest are due thereon, (b) increase the interest
rate, or the portion thereof payable on a current basis in cash, applicable
thereto, (c) change any event of default with respect thereto in any manner
adverse to the interests of the Lenders, (d) change the redemption, prepayment
or defeasance provisions thereof, (e) change the subordination provisions
thereof (or of any guaranty thereof or intercreditor arrangement with respect
thereto), (f) change any collateral therefor (other than to release such
collateral), or (g) change any other term or provision thereof, if the effect of
such change, together with all other changes made, is to increase materially the
obligations of the obligor thereunder or to confer any additional rights on the
holders of such Indebtedness that would be materially adverse (in the judgment
of Agents or Requisite Lenders so notifying Agents or Company) to Company,
Agents or the Lenders, without the prior written consent of Requisite Lenders;
(iv) the principal documents relating to Limited Recourse Debt with respect to a
Project if such amendment, restatement, modification or waiver, together with
all other amendments, restatements, modifications and waivers made, would
reasonably be expected to have a Material Adverse Effect; or (v) the New L/C
Facility Documents, unless (a) the terms of the New L/C Facility Documents as so
amended, restated, modified or waived are not more disadvantageous to Company
and its Subsidiaries and the Lenders (in a manner deemed material by Agents)
than the New L/C Facility Documents in effect on the Closing Date (it being
understood and agreed that any amendment, restatement, modification or waiver
having the effect of (1) increasing the maximum amount of any commitment to
extend loans (as opposed to letters of credit) under the New L/C Facility
Documents, or (2) reducing, delaying or waiving any otherwise required reduction
in the amount of any commitment to extend loans or letters of credit under the
New L/C Facility Documents, shall be deemed to be more disadvantageous for
purposes of this clause (a) without further notice or other action by Agents),
(b) the aggregate amount of Indebtedness and letters of credit outstanding, and
additional commitments to extend credit, if any, under the New L/C Facility
Documents as so amended, restated, modified or waived, do not exceed the
aggregate amount of the commitments to extend credit in effect under the New L/C
Facility Documents on the Closing Date, plus $5,000,000, (c) the obligations
under (and the Liens securing) such New L/C Facility Documents as so amended,
restated, modified or waived are subject to the Intercreditor Agreement on terms
substantively identical to the terms applicable to the obligations in effect
under the New L/C Facility Documents on the Closing Date, and (d) Company
provides to Agents reasonable prior advance written notice of such proposed
amendment, restatement, modification or waiver and copies of all material
contracts or other agreements being entered into in connection therewith).
7.13 END OF FISCAL YEARS; FISCAL QUARTERS.
Company shall not, and shall not permit any of its
Subsidiaries to change the end of the Fiscal Year of Company or any of its
Subsidiaries from December 31st.
7.14 AMENDMENT TO PENSION PLANS.
Borrowers shall not amend or modify any Pension Plan after the
Closing Date in any manner that results in or would reasonably be expected to
result in an increase in the amount of unfunded benefit liabilities (as such
unfunded benefit liabilities are determined in accordance with subsection 5.11D
hereof), unless such amendment or modification is required under applicable law.
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SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("EVENT OF
DEFAULT") shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Borrowers to pay when due any amount payable to an
Issuing Lender in reimbursement of any drawing under a Letter of Credit; failure
by Borrowers to pay any Mandatory Payment when due; or failure by Borrowers to
pay any interest or any fee or any other amount due under this Agreement within
five days after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries (other
than the Bankrupt Subsidiaries) to pay when due any principal of or
interest on or any other amount payable in respect of (a) the New L/C
Facility Documents or the High Yield Notes, (b) any one or more items
of Indebtedness (other than Indebtedness referred to in subsection 8.1
or in clause (a) above or clause (c) below) or Contingent Obligations
or Performance Guaranties, in each case in the principal amount of
$5,000,000 or more, individually or in the aggregate, or (c) Limited
Recourse Debt of Subsidiaries of Company (other than the Bankrupt
Subsidiaries) in the principal amount of $10,000,000 or more,
individually or in the aggregate (provided that Limited Recourse Debt
incurred in connection with one or more Projects to which less than
$2,000,000 in the aggregate of the operating income of Company and its
Subsidiaries (on a consolidated basis) is attributable for the 12-month
period immediately preceding the failure to pay such interest,
principal or other amounts shall not be considered Indebtedness or
Limited Recourse Debt solely for purposes of this clause (c)), in each
case beyond the end of any grace period provided therefor; or
(ii) breach or default by Company or any of its
Subsidiaries (other than the Bankrupt Subsidiaries) with respect to any
other material term of (a) the New L/C Facility Documents, the High
Yield Indenture or the High Yield Notes, (b) one or more items of
Indebtedness (other than Limited Recourse Debt) or Contingent
Obligations in the individual or aggregate principal amounts referred
to in clause (i) above or (c) any loan agreement, mortgage, indenture
or other agreement relating to such item(s) of Indebtedness or
Contingent Obligation(s), if the effect of such breach or default is to
cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder or
holders) to cause, that Indebtedness or Contingent Obligation(s) to
become or be declared due and payable prior to its stated maturity or
the stated maturity of any underlying obligation, as the case may be
(upon the giving or receiving of notice, lapse of time, both, or
otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of any Borrower to perform or comply with any term or
condition contained in subsection 6.2 or Section 7 of this Agreement; or
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8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement
made by Company or any of its Subsidiaries in any Credit Document or in any
statement or certificate at any time given by Company or any of its Subsidiaries
in writing pursuant hereto or thereto or in connection herewith or therewith
shall be false in any material respect on the date as of which made; or
8.5 OTHER DEFAULTS UNDER CREDIT DOCUMENTS.
Any Credit Party shall default in the performance of or
compliance with any term contained in this Agreement or any of the other Credit
Documents, other than any such term referred to in any other subsection of this
Section 8, and such default shall not have been remedied or waived within 30
days after the earlier of (i) an Officer of Company or such Credit Party
becoming aware of such default or (ii) receipt by Company or such Credit Party
of notice from Administrative Agent or any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall
enter a decree or order for relief in respect of DHC or Company or any
of its Subsidiaries (other than the Bankrupt Subsidiaries) in an
involuntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or
(ii) an involuntary case shall be commenced against DHC or
Company or any of its Subsidiaries (other than the Bankrupt
Subsidiaries) under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a
decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian
or other officer having similar powers over DHC or Company or any of
its Subsidiaries (other than the Bankrupt Subsidiaries), or over all or
a substantial part of its property, shall have been entered; or there
shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of DHC or Company or any of its Subsidiaries
(other than the Bankrupt Subsidiaries) for all or a substantial part of
its property; or a warrant of attachment, execution or similar process
shall have been issued against any substantial part of the property of
DHC or Company or any of its Subsidiaries (other than the Bankrupt
Subsidiaries), and any such event described in this clause (ii) shall
continue for 60 days unless dismissed, bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC..
(i) DHC or Company or any of its Subsidiaries (other than
the Bankrupt Subsidiaries) shall have an order for relief entered with
respect to it or commence a voluntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary
case to a
115
voluntary case, under any such law, or shall consent to the appointment
of or taking possession by a receiver, trustee or other custodian for
all or a substantial part of its property; or DHC or Company or any of
its Subsidiaries (other than the Bankrupt Subsidiaries) shall make any
assignment for the benefit of creditors; or
(ii) DHC or Company or any of its Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or the Governing
Body of DHC or Company or any of its Subsidiaries (other than the
Bankrupt Subsidiaries), or any committee thereof, shall adopt any
resolution or otherwise authorize any action to approve any of the
actions referred to in clause (i) above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar
process involving (a) in any individual case an amount in excess of $5,000,000
or (b) in the aggregate at any time an amount in excess of $5,000,000 (in either
case not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Company or any of its Subsidiaries (other than the Bankrupt Subsidiaries) or any
of their respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 60 days (or in any event later than five days prior to
the date of any proposed sale thereunder); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Company
or any of its Material Subsidiaries decreeing the dissolution or split up of
Company or that Subsidiary and such order shall remain undischarged or unstayed
for a period in excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events that individually
or in the aggregate result in or are reasonably be expected to result in
liability of Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in excess of $5,000,000 during the term of this Agreement; or there
shall exist as of January 1 of any year (based on, with respect to the Covanta
Energy Pension Plan, the actuarial valuation as of such January 1 and, with
respect to the SEIU Pension Plan, the actuarial valuation as of the immediately
preceding June 1), unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA, but determined on the basis of the actuarial assumptions
used for funding purposes with respect to a Pension Plan (as set forth in
Section 412 of the Internal Revenue Code, including, where applicable, the
interest rate assumptions set forth in Section 412(l) of the Internal Revenue
Code)), in the aggregate for all Pension Plans (excluding for purposes of such
computation any Pension Plans with respect to which assets exceed benefit
liabilities), in excess of (i) $20,000,000, in the event Assumptions are
generally as favorable as the Assumptions used in the 2003 plan year valuations
with respect to such Pension Plans, or (ii) $26,000,000, in the event the
Assumptions are generally less favorable than the Assumptions used in the 2003
plan year valuations with respect to such Pension Plans; or
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8.11 MATERIAL ADVERSE EFFECT.
Any event or change shall occur after the date of this
Agreement that has caused or evidences, either in any case or in the aggregate,
a Material Adverse Effect; or
8.12 CHANGE IN CONTROL.
A Change in Control shall have occurred; or
8.13 INVALIDITY OF INTERCREDITOR AGREEMENT; FAILURE OF SECURITY;
REPUDIATION OF OBLIGATIONS.
At any time after the execution and delivery thereof, (i) the
Intercreditor Agreement for any reason, other than the satisfaction in full of
all Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void, (ii) any
Collateral Document (with respect to the obligations thereunder of Company or
any Material Subsidiary (other than any Bankrupt Subsidiary)) shall cease to be
in full force and effect (other than by reason of a release of Collateral
thereunder in accordance with the terms hereof or thereof, the satisfaction in
full of the Secured Obligations or any other termination of such Collateral
Document in accordance with the terms hereof or thereof) or shall be declared
null and void, or Collateral Agent shall not have or shall cease to have a valid
and perfected Lien (with the priority set forth in subsection 5.15A) in any
Collateral purported to be covered thereby, in each case for any reason other
than the failure of Collateral Agent or any Lender to take any action within its
control, or (iii) any Credit Party shall contest the validity or enforceability
of any Credit Document in writing or deny in writing that it has any further
liability, including with respect to future advances by Lenders, under any
Credit Document to which it is a party; or
8.14 TERMINATION OF MATERIAL CONTRACTS.
Any Material Contract of the type described in clause (i) of
the definition of Material Contract, or any power purchase agreement to which
Company or any of its Subsidiaries is a party relating to a Project, shall be
terminated by Company or any of its Subsidiaries or by the counterparty or
counterparties thereto, if such termination is enforceable by Company, such
Subsidiary, or such counterparty or counterparties, unless (a) such Material
Contract is replaced within ten (10) days after such termination with a contract
that is reasonably acceptable to the Requisite Lenders and on substantially the
same economic terms as the relevant Material Contract being terminated, or (b)
the Subsidiary of Company party to such Material Contract or power purchase
agreement, as the case may be, is a Bankrupt Subsidiary and such termination
would not reasonably be expected to have a Material Adverse Effect, or (c) the
termination of such Material Contract occurs pursuant to the exercise by the
counterparty or counterparties thereto of a contractual right to terminate such
Material Contract for convenience and such termination would not reasonably be
expected to have a Material Adverse Effect; or
8.15 NOL TREATMENT.
Any Capital Stock of Company of any of its Subsidiaries shall
be issued, or any equity contribution shall be made to Company or any of its
Subsidiaries, if (i) such issuance or
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equity contribution would reasonably be expected to have a material adverse
effect on the availability or accessibility to Company and its Subsidiaries of
the net operating losses disclosed to Agents and Lenders prior to the Closing
Date as being held by DHC, or (ii) the proceeds of such issuance or equity
contribution are applied to any purpose prohibited under this Agreement:
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) an amount equal to 105% of the maximum amount that may at
any time be drawn under all Letters of Credit then outstanding (whether or not
any beneficiary under any such Letter of Credit shall have presented, or shall
be entitled at such time to present, the drafts or other documents or
certificates required to draw under such Letter of Credit), and (b) all other
Obligations shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by each Borrower, and obligation of Administrative Agent
and any other Issuing Lender to issue, renew or extend any Letter of Credit and
the right of Administrative Agent and any other Issuing Lender to issue, renew
or extend any Letter of Credit hereunder shall thereupon terminate, and (ii)
upon the occurrence and during the continuation of any other Event of Default,
Administrative Agent shall, upon the written request or with the written consent
of Requisite Lenders, by written notice to Borrowers, declare all or any portion
of the amounts described in clauses (a) and (b) above to be, and the same shall
forthwith become, immediately due and payable, and the obligation of
Administrative Agent and any other Issuing Lender to issue, renew or extend any
Letter of Credit and the right of Administrative Agent and any other Issuing
Lender to issue, renew or extend any Letter of Credit hereunder shall thereupon
terminate.
Any amounts described in clause (a) above, when received by
Collateral Agent, shall be held by Collateral Agent pursuant to the terms of the
Security Agreement and shall be applied as therein provided (subject to the
terms of the Intercreditor Agreement).
Further upon the occurrence and during the continuance of any
Event of Default, subject to the Intercreditor Agreement, Administrative Agent
and Collateral Agent may, and upon the written request of Requisite Lenders
shall, (i) exercise all rights and remedies of Administrative Agent or
Collateral Agent set forth in any of the Collateral Documents, in addition to
all rights and remedies allowed by, the United States and of any state thereof,
including but not limited to the UCC, and (ii) revoke Borrowers' rights to use
cash collateral in which Administrative Agent or Collateral Agent has an
interest. The enumeration of the foregoing rights and remedies is not intended
to be exhaustive and the exercise of any right or remedy shall not preclude the
exercise of any other rights or remedies, all of which shall be cumulative and
not alternative.
SECTION 9. ADMINISTRATIVE AGENT
9.1 APPOINTMENT.
A. APPOINTMENT OF ADMINISTRATIVE AGENT. Bank of America
is hereby appointed Administrative Agent hereunder and under the other Credit
Documents and Deutsche Bank is hereby appointed Documentation Agent hereunder.
Each Lender hereby authorizes each Agent to act as its agent in accordance with
the terms of this Agreement and the other Credit Documents. Each Agent agrees to
act upon the express conditions contained in this Agreement
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and the other Credit Documents, as applicable. The provisions of this Section 9
are solely for the benefit of Agents and Lenders and no Credit Party shall have
rights as a third party beneficiary of any of the provisions thereof. In
performing its functions and duties under this Agreement, Administrative Agent
(other than as provided in subsection 2.1B) shall act solely as an agent of
Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for any Borrower
or any other Credit Party.
B. CONTROL. Each Lender and Administrative Agent hereby
appoint each other Lender as agent for the purpose of perfecting Collateral
Agent's security interest in assets that, in accordance with the UCC, can be
perfected by possession or control.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
X. XXXXXX; DUTIES SPECIFIED. Each Lender irrevocably
authorizes each Agent to take such action on such Lender's behalf and to
exercise such powers, rights and remedies hereunder and under the other Credit
Documents as are specifically delegated or granted to such Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. An Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Credit Documents. Each Agent may exercise such powers, rights and remedies and
perform such duties by or through its Affiliates, agents or employees. No Agent
shall have, by reason of this Agreement or any of the other Credit Documents, a
fiduciary relationship in respect of any Lender or any Borrower; and nothing in
this Agreement or any of the other Credit Documents, expressed or implied, is
intended to or shall be so construed as to impose upon an Agent any obligations
in respect of this Agreement or any of the other Credit Documents except as
expressly set forth herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent shall
be responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Credit Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by such Agent to Lenders or by or on
behalf of any Borrower to such Agent or any Lender in connection with the Credit
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Borrowers or any other Person liable for the
payment of any Obligations, nor shall such Agent be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Credit Documents or
as to the use of the Letters of Credit or as to the existence or possible
existence of any Event of Default or Potential Event of Default. Anything
contained in this Agreement to the contrary notwithstanding, Administrative
Agent shall not have any liability arising from confirmations of the amount of
the Letter of Credit Usage or the component amounts thereof.
C. EXCULPATORY PROVISIONS. No Agent or any of its
officers, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by such Agent under or in connection with any of the
Credit Documents except to the extent caused by such Agent's gross negligence or
willful misconduct. An Agent shall be entitled to refrain from any
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act or the taking of any action (including the failure to take an action) in
connection with this Agreement or any of the other Credit Documents or from the
exercise of any power, discretion or authority vested in it hereunder or
thereunder unless and until such Agent shall have received instructions in
respect thereof from Requisite Lenders (or such other Lenders as may be required
to give such instructions under subsection 10.6) and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may be),
such Agent shall be entitled to act or (where so instructed) refrain from
acting, or to exercise such power, discretion or authority, in accordance with
such instructions. Without prejudice to the generality of the foregoing, (i)
each Agent shall be entitled to rely, and shall be fully protected in relying,
upon any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and
shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Company and its Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against an Agent as a result of
such Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Credit Documents in accordance with the
instructions of Requisite Lenders (or such other Lenders as may be required to
give such instructions under subsection 10.6).
D. AGENTS ENTITLED TO ACT AS LENDER. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, an Agent in its individual capacity as a
Lender hereunder. With respect to its participation in the Letters of Credit, an
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity. An Agent and its Affiliates may accept deposits
from, lend money to, acquire equity interests in and generally engage in any
kind of commercial banking, investment banking, trust, financial advisory or
other business with Company or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from any Borrower for services in connection with this Agreement
and otherwise without having to account for the same to Lenders. The Lenders
acknowledge that, pursuant to such activities, Deutsche Bank or Bank of America
or their respective Affiliates may receive information regarding a Borrower or
its Affiliates (including information that may be subject to confidentiality
obligations in favor of such Borrower or such Affiliate) and acknowledge that
the relevant Agent shall be under no obligation to provide such information to
them.
9.3 INDEPENDENT INVESTIGATION BY LENDERS; NO RESPONSIBILITY FOR
APPRAISAL OF CREDITWORTHINESS.
Each Lender agrees that it has made its own independent
investigation of the financial condition and affairs of Company and its
Subsidiaries in connection with the issuance of Letters of Credit hereunder and
that it has made and shall continue to make its own appraisal of the
creditworthiness of Company and its Subsidiaries. No Agent shall have any duty
or responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the issuance of any
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Letter of Credit or at any time or times thereafter, and no Agent shall have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify Agents and the officers, directors, employees, agents,
attorneys, professional advisors and affiliates of each of them to the extent
that any such Person shall not have been reimbursed by Borrowers, for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements and fees and disbursements of any financial advisor engaged by
Agents) or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against an Agent or and other such Persons in
exercising the powers, rights and remedies of an Agent or performing duties of
an Agent hereunder or under the other Credit Documents or otherwise in its
capacity as Agent in any way relating to or arising out of this Agreement or the
other Credit Documents; provided that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of an Agent resulting from
such Agent's gross negligence or willful misconduct. If any indemnity furnished
to an Agent or any other such Person for any purpose shall, in the opinion of
such Agent, be insufficient or become impaired, such Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished.
9.5 SUCCESSOR AGENTS.
Any Agent may resign at any time by giving 30 days' prior
written notice thereof to Lenders and Borrowers, and an Agent may be removed at
any time with or without cause by an instrument or concurrent instruments in
writing delivered to Borrowers and Administrative Agent and signed by Requisite
Lenders. If Bank of America is an Issuing Lender, any such resignation or
removal of Bank of America as Administrative Agent shall also constitute its
resignation or removal as Issuing Lender. Upon any such notice of resignation or
any such removal, Requisite Lenders shall have the right, upon five Business
Days' notice to Borrowers, to appoint a successor Agent. If, within 30 days
after the date of an Agent's notice of its intention to resign, no successor to
such Agent shall have been so appointed by Requisite Lenders, then such Agent's
resignation shall become effective on such date without the need for any further
action and the Lenders shall be deemed to have been appointed as successor to
such Agent hereunder and shall thereafter perform all the duties of such Agent
hereunder and/or under any other Credit Document until the appointment by
Requisite Lenders of some other successor to such Agent. Upon the acceptance of
any appointment as an Agent hereunder by a successor to an Agent, including the
Lenders as successor to an Agent (who shall be deemed to have accepted such
appointment pursuant to this subsection 9.5), such successor to such Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Agent (and, if the removed Agent is an
Issuing Lender, all the rights, powers, privileges and duties of an Issuing
Lender), the retiring or removed Agent shall be discharged from its duties and
obligations under this Agreement, and, if the retiring or removed Agent is an
Issuing Lender, such retiring or removed Issuing Lender shall be discharged from
its duties and obligations under this Agreement, without any other or further
act or deed on the part of such retiring or removed Issuing Lender or any other
Lender; provided, however, that the successor
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Issuing Lender shall be obligated to issue Letters of Credit in substitution for
the Letters of Credit, if any, outstanding at the time of such succession or to
make other arrangements satisfactory to the retiring or removed Issuing Lender
to effectively assume the obligations of such retiring or removed Issuing Lender
with respect to such outstanding Letters of Credit, and such retiring or removed
Issuing Lender shall continue to have all rights of an Issuing Lender with
respect to such outstanding Letters of Credit until the cancellation or
expiration of such Letters of Credit and the reimbursement of any amounts drawn
thereunder. After any retiring or removed Agent's resignation or removal
hereunder as an Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement and the other Credit Documents.
9.6 INTERCREDITOR AGREEMENT.
Each Lender hereby further authorizes Administrative Agent, on
behalf of and for the benefit of Lenders, to enter into and to be the agent for
and representative of Lenders under the Intercreditor Agreement, and each Lender
agrees to be bound by the terms of the Intercreditor Agreement; provided that
Administrative Agent shall not (i) enter into or consent to any material
amendment, modification, termination or waiver of any provision contained in the
Intercreditor Agreement or (ii) release any Collateral (except as otherwise
expressly permitted or required pursuant to the terms of this Agreement or the
applicable Collateral Document), in each case without the prior consent of
Requisite Lenders (or, if required pursuant to subsection 10.6, all Lenders).
Anything contained in any of the Credit Documents to the contrary
notwithstanding, each Borrower, Administrative Agent and each Lender hereby
agree that (1) no Lender shall have any right individually to realize upon any
of the Collateral under any Collateral Document, it being understood and agreed
that all powers, rights and remedies under the Collateral Documents may be
exercised solely by Collateral Agent for the benefit of Lenders in accordance
with the terms thereof and of the Intercreditor Agreement, and (2) in the event
of a foreclosure by Collateral Agent on any of the Collateral pursuant to a
public or private sale, Administrative Agent or any Lender may be the purchaser
of any or all of such Collateral at any such sale and Administrative Agent, as
agent for and representative of Lenders (but not any Lender or Lenders in its or
their respective individual capacities unless Requisite Lenders shall otherwise
agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any Collateral payable by
Administrative Agent at such sale.
9.7 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to Company or any of the Subsidiaries of
Company, Administrative Agent (irrespective of whether any Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether Administrative Agent shall have made any demand on
Borrowers) shall be entitled and empowered, by intervention in such proceeding
or otherwise
(i) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of any Obligations
that are owing and unpaid and to file such
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other papers or documents as may be necessary or advisable in order to
have the claims of Lenders and Agents (including any claim for the
reasonable compensation, expenses, disbursements and advances of
Lenders and Agents and their agents and counsel and all other amounts
due Lenders and Agents under subsections 2.2, 3.2 and 10.2) allowed in
such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Agents and their agents
and counsel, and any other amounts due Agents under subsections 2.2, 3.2 and
10.2.
Nothing herein contained shall be deemed to authorize
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lenders or to authorize
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
SECTION 10. MISCELLANEOUS
10.1 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS IN
LETTERS OF CREDIT.
A. GENERAL. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the successors and assigns of Lenders (it
being understood that Lenders' rights of assignment are subject to the further
provisions of this subsection 10.1). Neither any Borrower's rights or
obligations hereunder nor any interest therein may be assigned or delegated by
any Borrower without the prior written consent of all Lenders (and any attempted
assignment or transfer by any Borrower without such consent shall be null and
void). No sale, assignment or transfer or participation of any Letter of Credit
or any participation therein may be made separately from a sale, assignment,
transfer or participation of a corresponding interest in the relevant Letter of
Credit Commitment of the Lender effecting such sale, assignment, transfer or
participation. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Affiliates of each of Agents and Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement. No Lender
shall be permitted to assign any portion of its rights or obligations hereunder
to any other Person if, upon giving effect to such assignment, Borrowers would
be obligated to pay such assignee amounts greater than the amounts, if any,
which Borrowers would have been required to pay such assigning Lender under
subsection 2.4 if such assignment did not occur.
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B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Any Lender may
assign to one or more Eligible Assignees all or any portion of its
rights and obligations under this Agreement; provided that (a) except
(1) in the case of an assignment of the entire remaining amount of the
assigning Lender's rights and obligations under this Agreement or (2)
in the case of an assignment to a Lender or an Affiliate of a Lender or
an Approved Fund of a Lender, the aggregate amount of the Letter of
Credit Exposure of the assigning Lender and the assignee subject to
each such assignment shall not be less than $5,000,000, determined as
of the date the Assignment Agreement with respect to such assignment is
delivered to Administrative Agent or, if a trade date is specified in
the Assignment Agreement, as of such trade date, unless Administrative
Agent otherwise consents, such consent not to be unreasonably withheld
or delayed, (b) the parties to each assignment shall execute and
deliver to Administrative Agent an Assignment Agreement, together with
a processing and recordation fee of $5,000, and the Eligible Assignee,
if it shall not be a Lender prior to such assignment, shall deliver to
Administrative Agent a counterpart to the Intercreditor Agreement and
such documents and information reasonably requested by Administrative
Agent, including such forms, certificates or other evidence, if any,
with respect to United States federal income tax withholding matters as
the assignee under such Assignment Agreement may be required to deliver
to Administrative Agent pursuant to subsection 2.4B(iii), and no such
assignment shall be effective unless and until such Assignment
Agreement is accepted by Administrative Agent and recorded in the
Register as provided in subsection 10.1B(ii), (c) except in the case of
an assignment to another Lender, Administrative Agent and each Issuing
Lender shall have consented thereto (which consents shall not be
unreasonably withheld or delayed (it being understood that nothing in
this clause (c) shall affect the requirement that the relevant assignee
meet the requirements in the definition of Eligible Assignee and any
other applicable requirements of this Agreement)), and (d) no
assignment by a Defaulting Lender shall be permitted unless such
Defaulting Lender or assignee has funded such Defaulting Lender's
defaulted funding obligations with respect to participations in Letters
of Credit; provided, however, that Underwriting Lender shall have the
right to assign all or any portion of its rights and obligations under
this Agreement, from time to time, without regard to the $5,000,000
minimum assignment amount (but otherwise in accordance with the terms
of this Agreement, including this subsection 10.1) set forth in
subsection 10.1B(i)(a), so long as the aggregate amount of the Letter
of Credit Exposure of each of the Underwriting Lender and of such
assignee, determined as of the date the Assignment Agreement with
respect to such assignment is delivered to Administrative Agent or, if
a trade date is specified in the Assignment Agreement, as of such trade
date, shall not be less than $1,000,000. Upon such execution, delivery
and consent, from and after the effective date specified in such
Assignment Agreement, (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment Agreement, shall have
the rights and obligations of a Lender hereunder, (y) the assignee
shall be a party to the Intercreditor Agreement and, to the extent that
rights and obligations have been assigned to it pursuant to such
Assignment Agreement, shall have the rights and obligations of a
"Creditor Party" thereunder (as such term is defined in the
Intercreditor Agreement) and (z) the assigning Lender thereunder shall,
to the
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extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment Agreement, relinquish its rights (other
than any rights which survive the termination of this Agreement under
subsection 10.9B) and be released from its obligations under this
Agreement and the Intercreditor Agreement (and, in the case of an
Assignment Agreement covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of subsection 10.9; provided that, anything
contained in any of the Credit Documents to the contrary
notwithstanding (but subject to subsection 9.5), if such Lender is an
Issuing Lender such Lender shall continue to have all rights and
obligations of an Issuing Lender with respect to any Letters of Credit
issued by it until the cancellation or expiration of such Letters of
Credit and the reimbursement of any amounts drawn thereunder). Other
than as provided in subsection 10.5, any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not
comply with this subsection 10.1B shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights
and obligations in accordance with subsection 10.1C. Except as
otherwise provided in this subsection 10.1, no Lender shall, as between
Borrowers and such Lender, as between Agents and such Lender, or as
between Issuing Lender and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment or transfer
of, or any granting of participations in, all or any part of its Letter
of Credit Commitment, Letters of Credit or participations therein or
the other Obligations owed to such Lender.
(ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee and the processing and recordation fee referred to in
subsection 10.1B(i) and any forms, certificates or other evidence with
respect to United States federal income tax withholding matters that
such assignee may be required to deliver to Administrative Agent
pursuant to subsection 2.4B(iii), Administrative Agent shall, if
Administrative Agent and Issuing Lenders have consented to the
assignment evidenced thereby (to the extent each such consent is
required pursuant to subsection 10.1B(i)), (a) accept such Assignment
Agreement by executing a counterpart thereof as provided therein (which
acceptance shall evidence any required consent of Administrative Agent
to such assignment), (b) record the information contained therein in
the Register, and (c) give prompt notice thereof to Company.
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection
10.1B(ii).
C. PARTICIPATIONS. Any Lender may, without the consent
of, or notice to, any Borrower or Administrative Agent, sell participations to
one or more Persons (other than a natural Person or any Borrower or any of its
Affiliates) in all or a portion of such Lender's rights and/or obligations under
this Agreement; provided that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii)
Borrowers, Agents and Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision
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of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver directly affecting (i) the extension of the
Maturity Date or (ii) a reduction of the principal amount of or the rate of
interest payable on any Obligation allocated to such participation. Subject to
the further provisions of this subsection 10.1C, each Borrower agrees that each
Participant shall be entitled to the benefits of subsection 2.4 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection 10.1B. To the extent permitted by law, each Participant
also shall be entitled to the benefits of subsection 10.4 as though it were a
Lender, provided such Participant agrees to be subject to subsection 10.5 as
though it were a Lender. A Participant shall not be entitled to receive any
greater payment under subsection 2.4 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant
unless the sale of the participation to such Participant is made with Borrowers'
prior written consent. A Participant that would be a Non-US Lender if it were a
Lender shall not be entitled to the benefits of subsection 2.4.
D. PLEDGES AND ASSIGNMENTS. Any Lender may at any time
pledge or assign a security interest in all or any portion of the Obligations
owed to such Lender, to secure obligations of such Lender, including any pledge
or assignment to secure obligations to any Federal Reserve Bank; provided that
(i) no Lender shall be relieved of any of its obligations hereunder as a result
of any such assignment or pledge and (ii) in no event shall any assignee or
pledgee be considered to be a "Lender" or be entitled to require the assigning
Lender to take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information
concerning Company and its Subsidiaries (including CPIH Subsidiaries) in the
possession of that Lender from time to time to assignees and participants
(including prospective assignees and participants), subject to subsection 10.20.
F. AGREEMENTS OF LENDERS. Each Lender listed on the
signature pages hereof hereby agrees, and each Lender that becomes a party
hereto pursuant to an Assignment Agreement shall be deemed to agree, (i) that it
is an Eligible Assignee described in clause (i) of the definition thereof; (ii)
that it has experience and expertise in the funding of or purchasing
participations of the type purchased in the Letters of Credit; and (iii) that it
will fund or purchase such participations for its own account in the ordinary
course of its business and without a view to distribution thereof within the
meaning of the Securities Act or the Exchange Act or other federal securities
laws (it being understood that, subject to the provisions of this subsection
10.1, the disposition of such participations or any interests therein shall at
all times remain within its exclusive control).
G. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to
the assignments and participations permitted under the foregoing provisions of
this subsection 10.1, any Lender may assign and pledge all or any portion of the
Obligations owed to such Lender hereunder to any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and
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(ii) in no event shall such Federal Reserve Bank be considered to be a "Lender"
or be entitled to require the assigning Lender to take or omit to take any
action hereunder.
H. LENDER RATING REQUIREMENTS. Each Lender (to the
extent not already a Downgraded Lender) agrees to notify Administrative Agent
and Issuing Lenders within five Business Days after any downgrade of its long
term senior unsecured debt obligations to a rating of worse than "Baa3" from
Xxxxx'x or worse than "BBB-" from S&P (any Lender so downgraded being a
"DOWNGRADED LENDER"). Promptly, and in any event prior to the date which is 10
Business Days after such downgrade, the relevant Downgraded Lender, at its own
expense, shall deliver to Issuing Lenders, at such Downgraded Lender's option,
either (i) evidence satisfactory to Issuing Lenders that the Letter of Credit
Commitment of such Downgraded Lender is irrevocably guaranteed or similarly
supported pursuant to documentation and arrangements (and by Persons) reasonably
satisfactory to Administrative Agent and Issuing Lenders, or (ii) cash
collateral supporting the maximum amount of the Letter of Credit Commitment of
such Downgraded Lender pursuant to documentation and arrangements reasonably
satisfactory to Administrative Agent and Issuing Lenders. Each such Downgraded
Lender agrees to pay promptly on demand the reasonable fees and expenses of
Issuing Lenders and Administrative Agent (including reasonable costs, fees and
expenses of counsel) in connection with the arrangements for such fronting
institution, such guaranty or similar support or such cash collateral.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be consummated,
Borrowers agree, jointly and severally, to pay promptly (i) all the actual and
reasonable costs and expenses of negotiation, preparation and execution of the
Credit Documents and any consents, amendments, waivers or other modifications
thereto; (ii) all the costs of furnishing all opinions by counsel for Credit
Parties (including any opinions requested by Agents or Lenders as to any legal
matters arising hereunder) and of Borrowers' performance of and compliance with
all agreements and conditions on their part to be performed or complied with
under this Agreement and the other Credit Documents including with respect to
confirming compliance with environmental and insurance requirements; (iii) the
reasonable fees, expenses and disbursements of advisors and counsel to Agents
(including O'Melveny & Xxxxx LLP, counsel to Agents, and Ernst & Young Corporate
Finance LLC) in connection with the negotiation, preparation, execution,
interpretation or administration of the Credit Documents and any proposed
consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by any Borrower; (iv) all the actual costs and
reasonable expenses of creating and perfecting Liens in favor of Collateral
Agent on behalf of Secured Parties pursuant to any Collateral Document,
including filing and recording fees, expenses and taxes, stamp or documentary
taxes, search fees, title insurance premiums, and reasonable fees, expenses and
disbursements of counsel to Administrative Agent and Collateral Agent and of
counsel providing any opinions that Agents or Requisite Lenders may request in
respect of the Collateral Documents or the Liens created pursuant thereto; (v)
all the actual costs and reasonable fees, expenses and disbursements of any
auditors, accountants or appraisers and any environmental or other consultants,
advisors and agents (including Ernst & Young Corporate Finance LLC) employed or
retained by Agents or their counsel; (vi) all the actual costs and reasonable
expenses incurred in connection with the custody or preservation of any of the
Collateral; (vii) all other
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actual and reasonable costs and expenses incurred by Agents in connection with
the syndication of the Letter of Credit Commitments; and (viii) all the actual
costs and reasonable expenses, including reasonable attorneys' fees and costs of
settlement, incurred by Agents and Lenders in enforcing any Obligations of or in
collecting any payments due from any Credit Party hereunder or under the other
Credit Documents (including in connection with the sale of, collection from, or
other realization upon any of the Collateral) or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to the Chapter 11 Cases or
any other insolvency or bankruptcy proceedings.
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection
10.2, whether or not the transactions contemplated hereby shall be consummated,
Borrowers jointly and severally agree to defend (subject to Indemnitees'
selection of counsel), indemnify, pay and hold harmless Agents and Lenders
(including Issuing Lenders), and the officers, directors, employees, agents and
affiliates of Agents and Lenders (collectively called the "INDEMNITEES"),
including Issuing Lenders, from and against any and all Indemnified Liabilities
(as hereinafter defined); provided that Borrowers shall not have any obligation
to any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise solely from the gross negligence or
willful misconduct of that Indemnitee as determined by a final judgment of a
court of competent jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively,
any and all liabilities, obligations, losses, damages (including natural
resource damages), penalties, actions, judgments, suits, claims (including
Environmental Claims), costs (including the costs of any investigation, study,
sampling, testing, abatement, cleanup, removal, remediation or other response
action necessary to remove, remediate, clean up or xxxxx any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Credit Documents and the Chapter
11 Cases (it being understood that such Indemnified Liabilities arising out of
the Chapter 11 Cases shall apply solely to Indemnitees in their capacities as
Agents, Lenders and Issuing Lenders or officers, directors, employees, agents
and affiliates of Agents, Lenders or Issuing Lenders, and not in any other
capacities) or the transactions contemplated hereby or thereby (including the
issuance of Letters of Credit hereunder or the use or intended use of any
thereof, the failure of an Issuing Lender to honor a drawing under a Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto Government Authority, or any enforcement
of any of the Credit Documents (including any sale of, collection from, or other
realization upon any of the Collateral), (ii) the statements contained in the
commitment letter delivered by any Lender with respect thereto, or (iii) any
Environmental Claim or any
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Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of Company or any of its Subsidiaries (including, solely with respect to periods
prior to the Closing Date, CPIH Subsidiaries).
To the extent that the undertakings to defend, indemnify, pay
and hold harmless set forth in this subsection 10.3 may be unenforceable in
whole or in part because they are violative of any law or public policy,
Borrowers shall contribute the maximum portion that they are permitted to pay
and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by Indemnitees or any of them.
10.4 SET-OFF.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default each Lender
is hereby authorized by each Borrower at any time or from time to time, without
notice to any Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other Indebtedness at any time held or owing by that Lender or any Affiliate
of such Lender to or for the credit or the account of any Borrower or any other
Credit Party against and on account of the obligations and liabilities of any
Borrower or any other Credit Party to that Lender (or any Affiliate of such
Lender) or to any other Lender (or any Affiliate of any other Lender) under this
Agreement, the Letters of Credit and participations therein and the other Credit
Documents, including all claims of any nature or description arising out of or
connected with this Agreement, the Letters of Credit and participations therein
or any other Credit Document, irrespective of whether or not (i) any Agent or
any Lender shall have made any demand hereunder or (ii) any amounts in respect
of the Letters of Credit or any other amounts due hereunder shall have become
due and payable pursuant to Section 8 and although said obligations and
liabilities, or any of them, may be contingent or unmatured. Each Borrower
hereby further grants to Administrative Agent and each Lender a security
interest in all deposits and accounts maintained with Administrative Agent or
such Lender as security for the Obligations.
10.5 RATABLE SHARING.
A. Subject at all times to their obligations under the
Intercreditor Agreement, Lenders hereby agree among themselves that if any of
them shall, whether by voluntary or involuntary payment, by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Credit
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of Letters of Credit, fees and other amounts
then due and owing to that Lender hereunder or under the other Credit Documents
with respect to the Obligations (collectively, the "AGGREGATE AMOUNTS DUE" to
such Lender) that is greater than the proportion received by any other Lender in
respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (i) notify Administrative
Agent and each other Lender of the receipt of such payment and (ii) apply a
portion of such payment to purchase assignments
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(which it shall be deemed to have purchased from each seller of an assignment
simultaneously upon the receipt by such seller of its portion of such payment)
of the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender, those purchases shall be rescinded and the purchase
prices paid for such assignments shall be returned to such purchasing Lender
ratably to the extent of such recovery, but without interest. Each Borrower
expressly consents to the foregoing arrangement and agrees that any purchaser of
an assignment so purchased may exercise any and all rights of a Lender as to
such assignment as fully as if that Lender had complied with the provisions of
subsection 10.1B with respect to such assignment. In order to further evidence
such assignment (and without prejudice to the effectiveness of the assignment
provisions set forth above), each purchasing Lender and each selling Lender
agree to enter into an assignment agreement at the request of a selling Lender
or a purchasing Lender, as the case may be, in form and substance reasonably
satisfactory to each such Lender and to Administrative Agent.
B. Notwithstanding anything in this subsection 10.5 to
the contrary, in the event any one or more Lenders (for purposes of this
subsection 10.5, "ENFORCING LENDERS") receives any amounts that are subject to
the sharing provisions of subsection 10.5A as a result of such Enforcing Lender
or Enforcing Lenders, but not any Agents or all Lenders, commencing Proceedings
to recover such amounts, no Lender that is not an Enforcing Lender shall be
entitled to the benefits of subsection 10.5A with respect to the amounts
received by such Enforcing Lenders (i) unless and until such Lender has paid its
Pro Rata Share of the out-of-pocket costs and expenses (including legal fees and
expenses of counsel to such Enforcing Lenders) incurred by such Enforcing
Lenders in connection with such Proceedings or (ii) in any greater amount at any
time than such Lender would be entitled to receive under such subsection if all
Lenders paid their Pro Rata Shares of such costs and expenses.
10.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of this
Agreement or of the Notes or the Credit Documents, and no consent to any
departure by any Borrower therefrom, shall in any event be effective without the
written concurrence of Requisite Lenders; provided that no such amendment,
modification, termination, waiver or consent shall, without the consent of: (a)
each Lender with Obligations directly affected (whose consent shall be required
for any such amendment, modification, termination or waiver in addition to that
of Requisite Lenders) (1) reduce the principal amount of any funded amount with
respect to a participation in a Letter of Credit, (2) increase the maximum
aggregate amount of such Lender's Letter of Credit Commitment or Letters of
Credit, (3) postpone the Maturity Date, (4) postpone the date on which any
interest or any fees are payable, (5) decrease the interest rate borne by any
funded amount with respect to a participation in a Letter of Credit (other than
any waiver of any increase in the interest rate applicable pursuant to
subsection 2.1C, the penultimate sentence of subsection 3.2 or subsection 6.13)
or the amount of any fees payable hereunder, (6) reduce the amount or postpone
the due date of any reimbursement of a drawing (other than from a Mandatory
Payment) in respect of any Letter of Credit, (7) extend the expiration date of
any Letter of Credit beyond the Maturity Date, (8) change in any manner the
obligations of Lenders relating to the purchase of participations in Letters of
Credit, or (9) change in any manner or waive the provisions contained
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in subsection 8.1; (b) each Lender, (1) change in any manner the definition of
"Pro Rata Share" or the definition of "Requisite Lenders" (except for any
changes resulting solely from an increase in Letter of Credit Commitments
approved by Requisite Lenders), (2) change in any manner any provision of this
Agreement that, by its terms, expressly requires the approval or concurrence of
all Lenders, (3) release any Lien granted in favor of Administrative Agent or
Collateral Agent with respect to all or substantially all of the Collateral or
release any substantial portion of Borrowers from their obligations under this
Agreement, in each case other than in accordance with the terms of the Credit
Documents, or (4) change in any manner or waive the provisions contained in
subsection 10.6; (c) Administrative Agent, Documentation Agent and each Issuing
Lender, change in any manner the definition of "Eligible Assignee"; (d)
Administrative Agent and each Issuing Lender, change subsection 4.1X or the
obligations of any Lender under subsection 10.1H or subsection 2.6 (and no
consent of Requisite Lenders shall be required for any waiver of the conditions
precedent contained in subsection 4.1X or any waiver of any obligations of a
Lender contained in subsection 10.1H if such waiver is consented to by each
Issuing Lender and Administrative Agent); (e) the relevant Agent, affect the
rights or duties of such Agent (in its capacity as such Agent) under this
Agreement or any other Credit Document; and (f) the relevant Issuing Lender,
affect the rights or duties of such Issuing Lender (in its capacity as an
Issuing Lender) under this Agreement or any other Credit Document.
In addition, (i) no amendment, modification, termination or
waiver of any provision of Section 3 shall be effective without the written
concurrence of Administrative Agent and Documentation Agent and, with respect to
the purchase of participations in Letters of Credit, without the written
concurrence of each Issuing Lender that has issued an outstanding Letter of
Credit or has not been reimbursed for a payment under a Letter of Credit; (ii)
no amendment, modification, termination or waiver of any provision of Section 9
or of any other provision of this Agreement which, by its terms, expressly
requires the approval or concurrence of Administrative Agent or Documentation
Agent shall be effective without the written concurrence of Administrative Agent
or Documentation Agent, as the case may be; and (iii) no amendment,
modification, termination or waiver of any provision of this Agreement which, by
its terms, expressly requires the approval or concurrence of the applicable
Issuing Lender shall be effective without the written concurrence of such
Issuing Lender. Administrative Agent may, but shall have no obligation to, with
the concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on any Borrower or Borrowers in any case shall entitle any
Borrower or Borrowers to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 10.6 shall be binding upon each
Lender at the time outstanding, each future Lender and, if signed by Borrowers,
on Borrowers. Administrative Agent agrees that promptly after the effectiveness
of any amendment, termination, supplement, waiver or other modification of this
Agreement it shall provide, or cause to be provided, to each Lender a copy
thereof to the extent such a copy is available to Administrative Agent.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted
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by an exception to, or would otherwise be within the limitations of, another
covenant shall not avoid the occurrence of an Event of Default or Potential
Event of Default if such action is taken or condition exists.
10.8 NOTICES; EFFECTIVENESS OF SIGNATURES.
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, or sent by telefacsimile or United States mail or
courier service or (subject to the following paragraphs in this subsection 10.8)
electronic mail and shall be deemed to have been given (a) when delivered in
person or by courier service, (b) upon receipt of telefacsimile in complete and
legible form, (c) three Business Days after depositing it in the United States
mail with postage prepaid and properly addressed, or (d) in the case of
communications delivered by electronic mail to the extent provided in the
following paragraph, as provided pursuant to such paragraph; provided that
notices to Administrative Agent and any Issuing Lender shall not be effective
until received. For the purposes hereof, the address of each party hereto shall
be as set forth under such party's name on the signature pages hereof or (i) as
to Company and Administrative Agent, such other address as shall be designated
by such Person in a written notice delivered to the other parties hereto and
(ii) as to each other party, such other address as shall be designated by such
party in a written notice delivered to Administrative Agent.
Notices and other communications to the Lenders hereunder may
be delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by Administrative
Agent, provided that the foregoing shall not apply to notices to any Lender
pursuant to Section 2 or Section 3 hereof if such Lender has notified
Administrative Agent that it is incapable of receiving notices under such
Section by electronic communication. Administrative Agent or any Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.
Credit Documents and notices under the Credit Documents may be
transmitted and/or signed by telefacsimile. The effectiveness of any such
documents and signatures shall, subject to applicable law, have the same force
and effect as an original copy with manual signatures and shall be binding on
all Credit Parties, Agents and Lenders. Administrative Agent may also require
that any such documents and signature be confirmed by a manually-signed copy
thereof; provided, however, that the failure to request or deliver any such
manually-signed copy shall not affect the effectiveness of any facsimile
document or signature.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made
herein or in any other Credit Document shall survive the execution and delivery
of this Agreement and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied
by law to the contrary, the agreements of Borrowers set forth in subsections
2.4, 3.5A, 10.2, 10.3, 10.4, 10.19
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and 10.20 and the agreements of Lenders set forth in subsections 9.2C, 9.4,
10.5, 10.19 and 10.20 shall survive the cancellation or expiration of the
Letters of Credit and the reimbursement of any amounts drawn thereunder, and the
termination of this Agreement (and the benefits to a Lender of such agreements
of Borrowers shall survive such Lender's ceasing to be a party hereto pursuant
to subsection 10.1B).
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of an Agent or any Lender in
the exercise of any power, right or privilege hereunder or under any other
Credit Document shall impair such power, right or privilege or be construed to
be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Credit Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither any Agent nor any Lender shall be under any obligation
to marshal any assets in favor of Company or any other party or against or in
payment of any or all of the Obligations. To the extent that Company makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Agents or Lenders enforce any security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS;
DAMAGE WAIVER.
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Letter of Credit Commitments of any
other Lender hereunder. Nothing contained herein or in any other Credit
Document, and no action taken by Lenders pursuant hereto or thereto, shall be
deemed to constitute Lenders, or Lenders and Company, as a partnership, an
association, a Joint Venture or any other kind of entity. The amounts payable at
any time hereunder to each Lender shall be a separate and independent debt, and
each Lender shall be entitled to protect and enforce its rights arising out of
this Agreement and it shall not be
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necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
To the extent permitted by law, each Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with or as a result
of this Agreement, any other Credit Document, any transaction contemplated by
the Credit Documents, any Letter of Credit or the use of proceeds of drawings
thereunder.
10.14 RELEASE OF SECURITY INTEREST.
Upon the proposed sale or other disposition of any Collateral
that is permitted by this Agreement or to which Requisite Lenders have otherwise
consented, for which a Credit Party desires to obtain a security interest
release from Collateral Agent, such Credit Party shall deliver to Administrative
Agent and Collateral Agent an Officer's Certificate (i) stating that the
Collateral or the Capital Stock subject to such disposition is being sold or
otherwise disposed of in compliance with the terms hereof and of the Credit
Documents and (ii) specifying the Collateral or Capital Stock being sold or
otherwise disposed of in the proposed transaction. Upon the receipt of such
Officer's Certificate, Collateral Agent shall, at such Credit Party's expense,
so long as Collateral Agent (a) believes in good faith that the facts stated in
such Officer's Certificate are true and correct and (b), if the sale or other
disposition of such item of Collateral or Capital Stock constitutes an Asset
Sale, shall have received evidence satisfactory to it that arrangements
satisfactory to it have been made for delivery of the Net Asset Sale Proceeds if
and as required by subsection 2.3, execute and deliver such releases of its
security interest in such Collateral as may be reasonably requested by such
Credit Party. In the event of any conflict or inconsistency between this
subsection 10.14 and the terms of the Intercreditor Agreement, the terms of the
Intercreditor Agreement shall prevail.
10.15 HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.16 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER OR ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT
WOULD REQUIRE APPLICATION OF ANOTHER LAW.
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10.17 CONSTRUCTION OF AGREEMENT.
Each of the parties hereto acknowledges that it has been
represented by counsel in the negotiation and documentation of the terms of this
Agreement, that it has had full and fair opportunity to review and revise the
terms of this Agreement, and that this Agreement has been drafted jointly by all
of the parties hereto. Accordingly, each of the parties hereto acknowledges and
agrees that the terms of this Agreement shall not be construed against or in
favor of another party.
10.18 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY BORROWER ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, OR ANY
OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX (AS ANY AGENT,
AGENTS, LENDER OR LENDERS BRINGING SUCH ACTION MAY ELECT IN ITS OR THEIR SOLE
DISCRETION). BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH BORROWER, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS (AND SUBMITS TO) GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO SUCH BORROWER AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE
IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH BORROWER IN ANY
SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST
SUCH BORROWER IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.18
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO
THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
135
10.19 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS CREDIT TRANSACTION
OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. Each party hereto acknowledges that this waiver
is a material inducement to enter into a business relationship, that each has
already relied on this waiver in entering into this Agreement, and that each
will continue to rely on this waiver in their related future dealings. Each
party hereto further warrants and represents that it has reviewed this waiver
with its legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
10.19 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE CREDIT EXTENDED HEREUNDER. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
10.20 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement that has been identified as
confidential by Company in accordance with such Lender's customary procedures
for handling confidential information of this nature and in accordance with safe
and sound banking practices, it being understood and agreed by Borrowers that in
any event a Lender may make (a) disclosures to Affiliates and professional
advisors of such Lender, (b) disclosures reasonably required by (i) any bona
fide assignee, transferee or participant in connection with the contemplated
assignment or transfer by such Lender of any Obligations or any participations
therein, or (ii) any direct or indirect contractual counterparties in swap
agreements or such contractual counterparties' professional advisors provided
that such assignee, transferee, participant, contractual counterparty or
professional advisor agrees to keep such information confidential to the same
extent required of Lenders hereunder, (c) disclosures to any court or tribunal
(whether or not pursuant to subpoena) in connection with any action arising out
of or related to this Agreement, or (d) disclosures required or requested by any
Government Authority or representative thereof or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court order,
each Lender shall notify Company of any request by any Government Authority or
representative thereof (other than any such request in connection with any
examination of such Lender by such Government Authority) for disclosure of any
such non-public information prior to disclosure of such information; and
provided, further that in no event shall any Lender be obligated or
136
required to return any materials furnished by Company or any of its Subsidiaries
(including CPIH Subsidiaries).
Notwithstanding anything herein to the contrary, information
required to be treated as confidential by reason of the foregoing shall not
include, and Administrative Agent, each Lender and the respective Affiliates of
each of the foregoing (and the respective partners, directors, officers,
employees, agents, advisors and other representatives of each of the foregoing
and their respective Affiliates) (collectively, the "LENDER PARTIES") may
disclose to any and all Persons, without limitation of any kind, (x) any
information with respect to United States federal and state income tax treatment
and United States federal income tax structure of the transactions contemplated
hereby and any facts that may be relevant to understanding such tax treatment,
which facts shall not include for this purpose the names of the parties or any
other Person named herein, or information that would permit identification of
the parties or such other Persons, or any pricing terms or other non-public
business or financial information that is unrelated to such tax treatment or
facts, and (y) all materials of any kind (including opinions or other tax
analyses) relating to such tax treatment or facts that are provided to any of
the Lender Parties.
10.21 RELEASE OF PARTIES; WAIVERS.
A. Each Borrower, on behalf of itself and each of its
Subsidiaries, including CPIH Subsidiaries (collectively, the "RELEASORS"),
hereby releases, remises, acquits and forever discharges each Agent, each Lender
(in its capacity as a Lender hereunder and as a lender, collateral agent,
depository or letter of credit issuer and in any other capacity under or in
connection with the Prepetition Credit Documents or the DIP Credit Documents),
each other Prepetition Lender and DIP Lender (in its capacity as a lender,
collateral agent, depository or letter of credit issuer and in any other
capacity under or in connection with the Prepetition Credit Documents or the DIP
Credit Documents), and each of their respective employees, agents,
representatives, consultants, attorneys, fiduciaries, servants, officers,
directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations, related corporate divisions, participants and
assigns (all of the foregoing hereinafter called the "RELEASED PARTIES"), from
any and all actions and causes of action, judgments, executions, suits, debts,
claims, demands, liabilities, obligations, setoffs, recoupments, counterclaims,
defenses, damages and expenses of any and every character, known or unknown,
suspected or unsuspected, direct and/or indirect, at law or in equity, of
whatsoever kind or nature, whether heretofore or hereafter arising, for or
because of any matter or things done, omitted or suffered to be done by any of
the Released Parties prior to and including the date of execution hereof, and in
any way directly or indirectly arising out of or in any way connected to this
Agreement, any of the other Credit Documents, the Prepetition Credit Documents,
and DIP Credit Documents or the administration or enforcement of any of such
documents (all of the foregoing hereinafter called the "RELEASED MATTERS"). Each
Releasor acknowledges that the agreements in this subsection are intended to be
in full satisfaction of all or any alleged injuries or damages suffered or
incurred by such Releasor arising in connection with the Released Matters and
constitute a complete waiver of any right of setoff or recoupment, counterclaim
or defense of any nature whatsoever which arose prior to the Closing Date to
payment or performance of the Obligations. Each Releasor represents and warrants
that it has no knowledge of any claim by it against the Released Parties or of
any facts, or acts or omissions of the Released Parties which on the date hereof
would be the basis of a claim by the Releasors against the Released Parties
which is not
137
released hereby. Each Releasor represents and warrants that it has not purported
to transfer, assign, pledge or otherwise convey any of its right, title or
interest in any Released Matter to any other person or entity and that the
foregoing constitutes a full and complete release of all Released Matters.
Releasors have granted this release freely, and voluntarily and without duress.
10.22 NO FIDUCIARY DUTY.
No Agent nor any Lender has or shall have, by reason of this
Agreement or any of the Credit Documents, a fiduciary relationship in respect
of, or a fiduciary duty to, any Borrower, Borrowers, any other Credit Party or
Credit Parties, and the relationship between Administrative Agent, the other
Agents and Lenders, on one hand, and each Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor.
10.23 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto.
10.24 NO THIRD PARTY BENEFICIARIES
Nothing in this Agreement, express or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Indemnitees and Released Parties related to Agents, and
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
[Remainder of page intentionally left blank]
138
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BORROWERS:
COVANTA ENERGY CORPORATION, as a Borrower
By: _________________________________
Name: Xxxxxxx Xxxxxxx
Title: Authorized Officer
EACH OF THE ENTITIES NAMED ON SCHEDULE A ANNEXED
HERETO, as a Borrower
By: _________________________________
Name: Xxxxxxx Xxxxxxx
Title: Authorized Officer
Notice Address for each Borrower:
c/o Covanta Energy Corporation
00 Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Schedule A
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 Wallingford Associates, Inc.
62. Covanta Waste to Energy , LLC
63. Covanta Water Holdings, Inc.
64. Covanta Water Systems, Inc.
65. Covanta Water Treatment Services, Inc.
66. DSS Environmental, Inc.
67. ERC Energy II, Inc.
68. ERC Energy, Inc.
69. Haverhill Power, LLC
70. Heber Field Energy II, Inc.
71. Heber Loan Partners
72. LMI, Inc.
73. Mammoth Geothermal Company
74. Mammoth Power Company
75. Michigan Waste Energy, Inc.
76. Mt. Lassen Power
77. Pacific Geothermal Company
78. Pacific Oroville Power, Inc.
79. Pacific Wood Fuels Company
80. Pacific Wood Services Company
81. Three Mountain Operations, Inc.
82. Three Mountain Power, LLC
AGENTS AND LENDERS:
AGENTS AND LENDERS:
BANK OF AMERICA, N.A.,
as Administrative Agent and Co-Arranger
By: _____________________________________________
Name: Xxxxx X. Xx
Title: Managing Director
Notice Address:
Bank of America, N.A., as Administrative Agent
555 So. Flower Street, 17th Floor
CA9-706-17-54
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx, Vice President
Voice: (000) 000-0000
Fax: (000) 000-0000
email: xxxxx.xxxxx@xxxxxxxxxxxxx.xxx
For all operational issues for Letters of
Credit and Loans:
Bank of America, N.A., as Administrative Agent
000 Xxxx Xx., 00xx Xxxxx
XX: TX1-492-14-11
Xxxxxx, Xxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
Attention: Xxxxxxx X. Xxxxxx
E-mail:
xxxxxxx.x.xxxxxx@xxxxxxxxxxxxx.xxx
DEUTSCHE BANK SECURITIES, INC.,
as Documentation Agent and Co-Arranger
By: _______________________________________
Name:
Title:
By: _______________________________________
Name:
Title:
Notice Address:
Attention:
Deutsche Bank Securities, Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
UBS AG, STAMFORD BRANCH,
as Issuing Lender
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
BANC OF AMERICA SECURITIES LLC,
as Agent for BANK OF AMERICA, N.A., as a Lender
By: ___________________________________
Name:
Title:
BAYERISCHE HYPO-UND VEREINSBANK AG,
as a Lender
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
BEAR XXXXXXX & CO. INC.,
as a Lender
By: ___________________________________
Name:
Title:
DEUTSCHE BANK AG, NEW YORK BRANCH
as a Lender
By: ___________________________________
Name: Xxxxx Xxxxx
Title: Director
By: ___________________________________
Name: Xxxxxxx Xxxxxxx
Title: Vice President
IIB BANK LIMITED,
as a Lender
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
KBC BANK NV, NEW YORK BRANCH,
as a Lender
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
Notice Address:
Attention: Xxxx Xxxxx
KBC Bank NV, New York Branch
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
LANDESBANK HESSEN-THURINGEN GIROZENTRALE,
as a Lender
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
Notice Address:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance
Telephone: 000-000-0000
Telecopier: 000-000-0000
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX,
INCORPORATED, as a Lender
By: ___________________________________
Name:
Title:
THE BANK OF NEW YORK,
as a Lender
By: ___________________________________
Name:
Title:
UBS LOAN FINANCE LLC,
as a Lender
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
(FORMERLY KNOWN AS FIRSTAR BANK, N.A.),
as a Lender
By: ___________________________________
Name: Xxxx X. Xxxxxxx
Title: Vice President
WESTLB AG (FORMERLY KNOWN AS WESTDEUTSCHE
LANDESBANK GIROZENTRALE), NEW YORK BRANCH,
as a Lender
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
SCHEDULE A
COMPANY
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 Corporation
11. Covanta Energy Group, Inc.
12. Covanta Energy International, Inc.
13. Covanta Energy Resource Corp.
14. Covanta Energy Services, Inc.
15. Covanta Energy West, Inc.
16. Covanta Engineering Services, Inc.
17. Covanta Fairfax, Inc.
18. Covanta Geothermal Operations Holdings, Inc.
19. Covanta Geothermal Operations, Inc.
20. Covanta Haverhill Properties, Inc.
21. Covanta Haverhill, Inc.
22. Covanta Heber Field Energy, Inc.
23. Covanta Hennepin Energy Resource Co., Limited Partnership
24. Covanta Hillsborough, Inc.
25. Covanta Honolulu Resource Recovery Venture
26. Covanta Huntsville, Inc.
27. Covanta Hydro Energy, Inc.
28. Covanta Hydro Operations West, Inc.
29. Covanta Hydro Operations, Inc.
30. Covanta Imperial Power Services, Inc.
31. Covanta Indianapolis, Inc.
32. Covanta Kent, Inc.
33. Covanta Lancaster, Inc.
34. Covanta Xxx, Inc.
35. Covanta Long Island, Inc.
36. Covanta Xxxxxx Land Corp.
37. Covanta Xxxxxx, Inc.
38. Covanta Mid-Conn, Inc.
39. Covanta Xxxxxxxxxx, Inc.
40. Covanta New Martinsville Hydroelectric Corporation
41. Covanta New Martinsville Hydro-Operations Corporation
42. Covanta Oahu Waste Energy Recovery, Inc.
43. Covanta Omega Lease, Inc.
44. Covanta Onondaga Operations, Inc.
45. Covanta Operations of Union, LLC
46. Covanta OPW Associates, Inc.
47. Covanta OPWH, Inc.
48. Covanta Pasco, Inc.
49. Covanta Plant Services of New Jersey, Inc.
50. Covanta Power Equity Corporation
51. Covanta Power Pacific, Inc.
52. Covanta Power Plant Operations
53. Covanta Projects of Hawaii, Inc.
54. Covanta Projects, Inc.
55. Covanta RRS Holdings, Inc.
56. Covanta Secure Services, Inc.
57. Covanta SIGC Energy, Inc.
58. Covanta SIGC Energy II, Inc.
59. Covanta SIGC Geothermal Operations, Inc.
60. Covanta Stanislaus, Inc.
61. Covanta Systems, LLC
62. Covanta Wallingford Associates, Inc.
63. Covanta Waste to Energy , LLC
64. Covanta Water Holdings, Inc.
65. Covanta Water Systems, Inc.
66. Covanta Water Treatment Services, Inc.
67. DSS Environmental, Inc.
68. ERC Energy II, Inc.
69. ERC Energy, Inc.
70. Haverhill Power, LLC
71. Heber Field Energy II, Inc.
72. Heber Loan Partners
73. LMI, Inc.
74. Mammoth Geothermal Company
75. Mammoth Power Company
76. Michigan Waste Energy, Inc.
77. Mt. Lassen Power
78. Pacific Geothermal Company
79. Pacific Oroville Power, Inc.
80. Pacific Wood Fuels Company
81. Pacific Wood Services Company
82. Three Mountain Operations, Inc.
83. Three Mountain Power, LLC
