SIXTH AMENDMENT
TO DEBTOR-IN-POSSESSION
CREDIT AGREEMENT, LIMITED CONSENT AND
AMENDMENT TO SECURITY AGREEMENT
This SIXTH AMENDMENT TO DEBTOR-IN-POSSESSION CREDIT AGREEMENT
AND LIMITED CONSENT (this "Amendment") is dated as of March 25, 2003 and entered
into by and among COVANTA ENERGY CORPORATION, a Delaware corporation
("Company"), and THE SUBSIDIARIES OF COMPANY LISTED ON THE SIGNATURE PAGES
HEREOF AS BORROWERS (collectively, Company and such Subsidiaries of Company are
"Borrowers" and each a "Borrower"), THE SUBSIDIARIES OF COMPANY LISTED ON THE
SIGNATURE PAGES HEREOF AS SUBSIDIARY GUARANTORS (collectively, the "Subsidiary
Guarantors"), THE LENDERS PARTY HERETO, BANK OF AMERICA, N.A., as Administrative
Agent for the Lenders ("Administrative Agent"), and DEUTSCHE BANK AG, NEW YORK
BRANCH, as Documentation Agent for the Lenders ("Documentation Agent"), and is
made with reference to that certain Debtor-in-Possession Credit Agreement dated
as of April 1, 2002, as amended by that certain First Amendment to
Debtor-in-Possession Credit Agreement and Security Agreement dated as of April
3, 2002, that certain Second Amendment to Debtor-in-Possession Credit Agreement
dated as of May 10, 2002, that certain Third Amendment and Limited Waiver to
Debtor-in-Possession Credit Agreement dated as of October 4, 2002, that certain
Fourth Amendment to Debtor-in-Possession Credit Agreement and Limited Consent
dated as of December 10, 2002 and that certain Fifth Amendment to
Debtor-in-Possession Credit Agreement dated as of December 18, 2002 (as so
amended, the "Credit Agreement"), by and among Borrowers, the financial
institutions parties thereto as Lenders, Documentation Agent and Administrative
Agent. Capitalized terms used herein without definition shall have the same
meanings herein as set forth in the Credit Agreement (as amended by this
Amendment).
RECITALS
WHEREAS, Borrowers and the undersigned Lenders desire to
extend the termination date of the credit facilities under the Credit Agreement
and to make certain other amendments to the Credit Agreement and the Security
Agreement, subject to the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT; LIMITED CONSENTS
1.1 Provisions Relating to Defined Terms.
A. Subsection 1.1 of the Credit Agreement is hereby amended by
deleting the definitions of "Advance Limit", "Budget Period", "Designated
Non-Material Asset Sales", "Minimum Cumulative Consolidated Operating Income
Schedule", "Monthly Budget" and "Tranche A Letter of Credit Sublimit" in their
entirety and inserting the following new definitions in the appropriate
alphabetical order:
"Advance Limit" means, with respect to Tranche A Loans (other
than Tranche A Loans made pursuant to subsection 3.3B) as of any date
of determination, the total amount of the Tranche A Commitments then in
effect.
"Budget Period" means (i) as of any date of determination
prior to the Sixth Amendment Effective Date, the period from Petition
Date through and including the Stated Maturity Date (determined as of
such date of determination), and (ii) as of any date of determination
on or after the Sixth Amendment Effective Date, the period from January
4, 2003 through and including the Stated Maturity Date (determined as
of such date of determination).
"Designated Non-Material Asset Sales" means, collectively, the
sales of the Subsidiaries, divisions or businesses of Company and its
Subsidiaries (including the equity interests of certain Subsidiaries
and their assets or of Company's or any of its Subsidiaries' interests
in Projects) described on Annex A to the Third Amendment or Annex E to
the Sixth Amendment.
"Minimum Cumulative Consolidated Operating Income Schedule"
has the meaning assigned to that term in subsection 6.1(xxi); provided,
however, that the Minimum Cumulative Consolidated Operating Income
Schedule shall be deemed supplemented as of the Sixth Amendment
Effective Date by the supplement thereto delivered to the Agents in
accordance with Section 3.1 of the Sixth Amendment.
"Monthly Budget" means, (i) prior to the Sixth Amendment
Effective Date, the consolidated cash flow projections delivered by
Borrowers to Agents pursuant to subsection 4.1F for each month ending
during the Budget Period, setting forth on a line-item basis monthly
anticipated cash receipts and disbursements, provided that, upon
approval by Agents or Requisite Lenders, as the case may be, of any
monthly cash flow projections delivered pursuant to subsection
6.1(xix)(a) or pursuant to clause (iv) of the definition of "Final
Borrowing Order", the Monthly Budget described in this clause (i) shall
be deemed supplemented and/or restated with respect to the following
month and each month thereafter in the Budget Period by the projections
for each such month covered by such approved cash flow projections; and
(ii) on and after the Sixth Amendment Effective Date, the consolidated
cash flow projections attached hereto as Exhibit XVI, setting forth on
a line-item basis monthly anticipated cash receipts and disbursements.
"Overhead Report" means, with respect to any month, a report
prepared by Company in the form attached hereto as Exhibit XVII
reflecting overhead expenses of Company and its Subsidiaries for such
month.
"Sixth Amendment" means the Sixth Amendment to
Debtor-in-Possession Credit Agreement, Limited Consent and Amendment to
Security Agreement by and among Borrowers, Agents and Lenders, dated as
of March 25, 2003.
"Sixth Amendment Effective Date" has the meaning assigned to
that term in Section 3 of the Sixth Amendment.
"Tranche A Letter of Credit Sublimit" means (i) prior to the
Sixth Amendment Effective Date, $14,200,000; (ii) on and after the
Sixth Amendment Effective Date, $12,200,000; and (iii) at any time
after the Sixth Amendment Effective Date, such greater amount as may be
approved in writing by Agents and Requisite Class Lenders of the Class
of Tranche A Lenders (which approval shall be at the sole discretion of
such Agents and Lenders and shall be evidenced by an amendment to this
Agreement in form reasonably satisfactory to Agents and such Lenders)
from time to time upon a request from Borrowers to increase such
amount; provided, however, that no such increase shall cause the
Tranche A Letter of Credit Sublimit to exceed the total amount of the
Tranche A Commitments minus the outstanding amount of Tranche A Loans
(excluding Tranche A Loans made pursuant to subsection 3.3B).
B. The definition of "Stated Maturity Date" in subsection 1.1 of
the Credit Agreement is hereby amended by inserting at the end thereof the
following sentence:
"On and as of the Sixth Amendment Effective Date, the Stated Maturity
Date shall be deemed to have been extended to October 1, 2003 pursuant
to the first proviso to the preceding sentence.".
1.2 Provisions Relating to Tranche A Commitments and Tranche A
Letter of Credit Sublimit.
A. Subsection 2.1A(i) of the Credit Agreement is hereby further
amended by adding (immediately prior to the ";" immediately preceding the last
proviso to the second sentence thereof) the following new proviso:
"; provided, further, however, that on the Sixth Amendment Effective
Date, the aggregate amount of the Tranche A Commitments shall be
further reduced by the amount necessary so that the aggregate amount of
Tranche A Commitments on such date after giving effect to such
reduction shall be $14,200,000, and the Tranche A Commitments of
Lenders shall be ratably reduced to reflect such reduction in the
aggregate amount of the Tranche A Commitments), with $2,000,000 of such
reduction to be applied to the Tranche A Letter of Credit Sublimit then
in effect, as set forth in clause (ii) of the definition of Tranche A
Letter of Credit Sublimit".
B. Subsection 2.4A(iv)(a) of the Credit Agreement is hereby
further amended by deleting the reference to "Tranche A Letter of Credit Usage"
contained in clause (2) thereof and substituting therefor "Tranche A Letter of
Credit Sublimit (or the Tranche A Letter of Credit Usage, in the case of any
Mandatory Payment from Net Asset Sale Proceeds the application of which under
this subsection 2.4A(iv)(a) would cause the Tranche A Commitments to be less
than the Tranche A Letter of Credit Sublimit)".
1.3 Provisions Relating to Mandatory Prepayments.
A. Subsection 2.4A(iii)(a) of the Credit Agreement is hereby
amended by deleting it in its entirety and substituting therefor the following:
"(a) Prepayments and Reductions From Net Asset Sale Proceeds
and Ottawa Disposition 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 (other than any Approved Asset
Sale to the extent the Net Asset Sale Proceeds from such Approved Asset
Sale do not exceed $5,000,000) or any Ottawa Disposition Proceeds,
Company shall make a Mandatory Payment in an aggregate amount equal to
the amount of such Net Asset Sale Proceeds or Ottawa Disposition
Proceeds, as the case may be.".
B. Subsection 2.4A(iii)(h) of the Credit Agreement is hereby
amended by inserting immediately prior to the reference to "Net
Insurance/Condemnation Proceeds" contained therein the phrase "Ottawa
Disposition Proceeds,".
1.4 Provisions Relating to Affirmative Covenants.
A. Subsection 6.1 of the Credit Agreement is hereby amended by
deleting clause (b) of subsection 6.1(i) in its entirety and substituting
therefor the following:
"(b) containing, in the case of reports delivered with respect to a
month's end, (1) a Project-by-Project update on operational and legal
developments which could reasonably be expected to be materially
adverse in relation to such Project and (2) for each month's end
commencing with March 31, 2003, an Overhead Report with respect to such
month (with such Overhead Report for any month to be due on the 5th day
of the second month following such month),".
B. Subsection 6.1 of the Credit Agreement is hereby further
amended by deleting clause (a) of subsection 6.1(xix) in its entirety and
substituting therefor the following:
"(a) a consolidated cash forecast for Company and its Subsidiaries, in
form consistent with the Monthly Budget (with line items for projected
cash receipts and cash expenditures corresponding to those in such
Monthly Budget) then in effect and, solely with respect to periods
prior to the Sixth Amendment Effective Date, in substance satisfactory
to Agents (unless within 3 Business Days after receipt by Lenders of
such cash forecast Requisite Lenders shall have notified Agents of
their objection thereto, in which event any cash forecast submitted by
Borrowers in lieu thereof shall be required to be satisfactory to
Requisite Lenders), with monthly projections for the following month
and each other month remaining in the Budget Period, together with an
explanation of the material assumptions on which such projections are
based, and".
1.5 Provisions Relating to Negative Covenants.
A. Subsection 7.6A of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor the following:
"A. Post Sixth Amendment Expenditures Covenants. After the Sixth
Amendment Effective Date, Borrowers shall not, and shall not permit their
respective Subsidiaries to:
(i) make cash expenditures in any month of a type which
would be classified under any of the disbursement line items in
the Monthly Budget (other than the line items labeled "Debt
Service", "Reorganization Cost" and "Tax Obligations") if (a)
such expenditures would cause cumulative expenditures for such
month and the two preceding months which would be classified
under all of such line items to exceed, in the aggregate, 110% of
the aggregate of the correlative amounts for such line items set
forth in the Monthly Budget for such three-month period, or (b)
such expenditures would cause cumulative expenditures for the
period from the commencement of the Budget Period through such
month which would be classified under all of such line items to
exceed, in the aggregate, the sum of (x) the aggregate of the
correlative amounts for such line items set forth in the Monthly
Budget for such month and each preceding month and (y) 5% of the
aggregate of the correlative amounts for such line items set
forth in the Monthly Budget for the entire Budget Period; or
(ii) make cash expenditures in any month of a type which
would be classified under any of the line items labeled "WTE Non
Cap Ex Disbursements Non-Filed Entities", "IPP Non Cap Ex
Disbursements Non-Filed Entities" or under the line item labeled
"Disbursements" under the heading "International Operations", if
such expenditures would cause cumulative expenditures for the
period from the commencement of the Budget Period through such
month which would be classified under all of such line items to
exceed, in the aggregate, the sum of (a) the correlative amounts
for such line item set forth in the Monthly Budget for such month
and each preceding month and (b) for months prior to July 2003,
$6,000,000, and for July 2003 and thereafter, $9,000,000; or
(iii) make cash expenditures in any month of a type which
would be classified under the line item labeled "Total
Maintenance Cap Ex" (under the heading "Domestic Operations"), if
such expenditures would cause cumulative expenditures for the
period from the commencement of the Budget Period through such
month which would be classified under such line item to exceed
the sum of (a) the cumulative total amount for such line item set
forth in the Monthly Budget for such month and each preceding
month and (b) $4,000,000; or
(iv) make cash expenditures in any month of a type which
would be classified under the line item labeled "Disbursements"
(under the heading "Investment Cap Ex") if the aggregate amount
of such expenditures made from the commencement of the Budget
Period would exceed the cumulative total amount for such line
item set forth in the Monthly Budget for such month and each
preceding month; or
(v) make cash expenditures in any month of a type which
would be classified under the line item labeled "Non-Core
Operations" (under the heading "Non-Core") if the aggregate
amount of such expenditures made from the commencement of the
Budget Period would exceed $3,500,000; or
(vi) make cash expenditures on or after the Sixth Amendment
Effective Date in connection with the Senators Hockey Club or the
Senators Lease (other than payments otherwise permitted under
this subsection 7.6 that would be classified under the line item
labeled "Professional Fees", under the heading "Reorganization
Costs"); or
(vii) make cash expenditures in the Budget Period of a type
which would not be classified under any of the line items
reflected in the Monthly Budget, notwithstanding any other more
permissive provision of this Agreement.
For purposes of this Agreement, whether or not a particular
expenditure shall or would be classified under a particular line item
of the Monthly Budget shall be determined in a manner consistent with
Company's classification of expenditures of the same type as such
expenditure in preparing the Monthly Budget (as defined in clause (ii)
of the definition of "Monthly Budget").".
B. Subsection 7.7(i) of the Credit Agreement is hereby further
amended by (i) adding immediately after the "(i)" at the beginning thereof
"(a)", and (ii) adding immediately after the ";" at the end thereof the
following:
"and (b) from time to time after the Sixth Amendment Effective Date, if
Company determines in its reasonable judgment that such transactions
are in the best interests of Borrowers and are not materially adverse
to the interests of the Lenders, Company and its Subsidiaries may, so
long as no Event of Default shall have occurred and be continuing,
liquidate or dissolve any Foreign Subsidiary or other Person that is
not incorporated or organized under the laws of the United States of
America, any state thereof or the District of Columbia and is owned in
part by Company or any of its Subsidiaries (any such Foreign Subsidiary
or other Person being a "Foreign Owned Entity"), or sell or convey the
Capital Stock of such Foreign Owned Entity to a Subsidiary of Company
other than the Subsidiary owning such Foreign Owned Entity on the Sixth
Amendment Effective Date, or consummate other restructuring or
combination transactions with respect to Foreign Owned Entities, so
long as in each case such transactions shall effectively reduce U.S.
tax obligations on the income earned and/or repatriated by Foreign
Owned Entities (any such transaction being referred to herein as a "Tax
Restructuring"); and (c) from time to time after the Sixth Amendment
Effective Date, if Company determines in its reasonable judgment that
such transactions shall be effective to reduce its expenses, are in the
best interests of Borrowers and are not materially adverse to the
interests of the Lenders, Company and its Subsidiaries may dissolve any
Subsidiary that holds substantially no assets (other than claims
against, or Securities of, directly or indirectly wholly owned
Subsidiaries), is engaged in substantially no operations and with
respect to which Company shall have provided evidence satisfactory to
Agents of the foregoing; provided, that in the case of any transaction
described in clause (b) or (c), (1) no Capital Stock that is pledged as
Collateral under the Collateral Documents shall cease to be so pledged
other than as a result of the dissolution of the Person that issued
such Capital Stock, or as a result of a merger of such Person (or a
sale of all of the Capital Stock of such Person to a wholly owned
Subsidiary of Company) where a percentage of the Capital Stock of the
surviving Person (or acquiring Person, as the case may be) equal to the
percentage of the Capital Stock of the disappearing Person (or acquired
Person, as the case may be) pledged as Collateral under the Collateral
Documents is pledged as Collateral under the Collateral Documents, (2)
except as permitted under the preceding clause (1), no assets subject
to the Lien granted under the Collateral Documents immediately prior to
such transaction shall cease to be subject to the Lien granted under
the Collateral Documents as a result of such transaction, (3) no such
transaction shall result in dividends or distributions of any property
or assets, or the issuance of any Capital Stock of any Person, to any
Person other than a wholly owned Subsidiary of Company, (4) the
structure and documentation for such transaction shall be provided in
advance to Agents and their counsel and shall be satisfactory to them,
(5) Company and its Subsidiaries shall not directly or indirectly
incur, create, assume or become liable with respect to any additional
Indebtedness, Contingent Obligations, funding obligations or other
obligations to provide funds, credit or credit support in connection
with or as a result of any such transaction (other than intercompany
Indebtedness to Company or one or more wholly owned Subsidiaries of
Company incurred as part of a Tax Restructuring and otherwise permitted
under subsection 7.1), (6) Company and its Subsidiaries shall not
directly or indirectly make any additional Investment in any Person in
connection with or as a result of any such transaction, other than
Investments resulting from the payment of costs and expenses described
in clause (7) below and Investments consisting of Indebtedness or other
Securities of wholly owned Subsidiaries issued or transferred to other
wholly owned Subsidiaries as part of a Tax Restructuring, and (7)
Company shall submit to Agents in connection with each such transaction
an Officer's Certificate certifying (x) as to the conditions set forth
in preceding clauses (1) through (3) and (5) through (6), (y) in the
case of a transaction described in clause (b) above, that, in Company's
opinion, such transaction shall effectively reduce U.S. tax obligations
on the income earned and/or repatriated by Foreign Owned Entities, and
(z) that all fees, costs and expenses of attorneys and advisors of
Company and its Subsidiaries in connection with such transaction (which
shall be set forth in a statement in reasonable detail attached to such
Officer's Certificate) shall not exceed $50,000, and the aggregate
amount of all such fees, costs and expenses for all such transactions
(including but not limited to advisory fees and success fees) shall not
exceed, in the aggregate, $250,000;".
C. Subsection 7.7 of the Credit Agreement is hereby further
amended by adding immediately after the end of the last sentence thereof the
following new sentence:
"Nothing in this subsection 7.7 shall (1) prohibit Borrowers and their
Subsidiaries from rejecting, pursuant to Section 365 of the Bankruptcy
Code, the lease agreement, service or operating agreement and steam and
power supply agreements relating to the Tulsa waste-to-energy Project,
so long as Borrowers (A) certify concurrently with such rejection that
such action will not have a Material Adverse Effect and (B) obtain
approval of such rejection from the Bankruptcy Court, and (2) the
involuntary receivership and liquidation of Greenway Insurance Company
of Vermont, a Vermont corporation.".
D. Subsection 7.14A of the Credit Agreement is hereby amended by
adding at the end thereof the following new sentence:
"Nothing in this subsection 7.14A shall prohibit Company and its
Subsidiaries from rejecting, pursuant to Section 365 of the Bankruptcy
Code, the lease agreement, service or operating agreement and steam and
power supply agreements relating to the Tulsa waste-to-energy Project,
so long as Borrowers (a) certify concurrently with such rejection that
such action will not have a Material Adverse Effect and (b) obtain
approval of such rejection from the Bankruptcy Court.".
1.6 Addition of Exhibits.
The Credit Agreement is hereby further amended by adding thereto a
new Exhibit XVI and a new Exhibit XVII in the forms attached hereto as Annex A
and Annex B, respectively.
1.7 Schedules to the Credit Agreement.
Schedule 3.1A(i) to the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor a new Schedule 3.1A(i), in
the form attached hereto as Annex C.
1.8 Limited Consent.
The undersigned Lenders hereby consent to extending the Stated
Maturity Date to October 1, 2003, as requested by Company and as reflected in
this Amendment. The consent set forth in this paragraph shall be limited
precisely as written and is provided solely for the purpose of permitting the
aforementioned extension of the Stated Maturity Date, and this consent does not
constitute, nor should it be construed as, a consent to any other extension of
the Stated Maturity Date in any other instance, or as a waiver of compliance by
Borrowers with respect to any term, provision or condition of the Credit
Agreement or any other instrument or agreement referred to therein.
1.9 Limited Consent Re Prepetition Liens.
The undersigned Lenders, in their respective capacities as
Prepetition Lenders, hereby consent to the release, termination and
extinguishment of, and authorize Prepetition Agent to release, terminate and
extinguish (A) all liens granted under the Prepetition Credit Documents on (i)
the Capital Stock of Island Power Corporation, (ii) the rights of Covanta Energy
Group to subscribe for additional Capital Stock of Island Power Corporation and
(iii) obligations owed to Covanta Power International Holdings with respect to
intercompany advances made by it to Island Power Corporation, in each case to
the extent such Capital Stock, rights and obligations are sold in a Designated
Non-Material Asset Sale, so long as such sale is permitted under the Credit
Agreement, and (B) all liens granted under the Prepetition Credit Documents on
the Capital Stock of any Foreign Owned Entity solely to the extent such Capital
Stock is sold or cancelled in a Tax Restructuring permitted under subsection
7.7(i) and such release of Liens is necessary in order to secure the tax
benefits sought in such Tax Restructuring. The consent and authorization set
forth in this paragraph shall be limited precisely as written and is provided
solely for the purpose of authorizing Prepetition Agent to release such liens,
and this consent does not constitute, nor should it be construed as, either (x)
a waiver of compliance by Prepetition Lenders with respect to any other term,
provision or condition of the Prepetition Credit Agreement, the Intercreditor
Agreement or any other instrument or agreement referred to therein, or (y) a
release, termination or extinguishment of such liens, it being understood that
such release, termination and extinguishment shall occur pursuant to a separate
writing in each instance from Prepetition Agent.
1.10 Ratification of Extension of Letters of Credit.
The undersigned Lenders hereby ratify, confirm and approve all
actions taken by Administrative Agent and Issuing Lenders to extend or permit
the extension of the Tranche A Letters of Credit and Tranche B Letters of Credit
described on Annex D attached hereto to the dates set forth on such Annex. The
ratification, confirmation and approval set forth in this paragraph shall be
limited precisely as written, and this ratification, confirmation and approval
does not constitute, nor should it be construed as, a waiver of compliance by
Borrowers or Lenders with respect to (i) subsection 3.1A(i) or 3.1A(ii) of the
Credit Agreement except to the extent of the extensions expressly ratified,
confirmed and approved in this paragraph, (ii) subsection 3.1A(i) or 3.1A(ii) of
the Credit Agreement in any other instance, or (iii) any other term, provision
or condition of the Credit Agreement or any other instrument or agreement
referred to therein.
SECTION 2. AMENDMENT TO THE SECURITY AGREEMENT
Section 7(a) of the Security Agreement is hereby amended by
deleting the phrase "keep the items of Equipment and Inventory owned by such
Grantor having a value in excess of $500,000 at the places therefor specified on
Schedule 4(b)" and substituting therefor the phrase "keep the items of Equipment
and Inventory owned by such Grantor having a value in excess of $500,000 at such
Grantor's principal place(s) of business and at the places therefor specified on
Schedule 4(b)".
SECTION 3. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall only become effective upon the
first date on which all of the following conditions precedent shall have been
satisfied (the date of satisfaction of such conditions being referred to herein
as the "Sixth Amendment Effective Date"):
3.1 Operating Income Schedule Supplement. Agents shall have received a
supplement to the Minimum Cumulative Consolidated Operating Income Schedule
satisfactory in form and substance to Agents.
3.2 Amendment Fee. Company shall have paid to Administrative Agent,
for distribution to each Tranche A Lender that has executed and delivered a
counterpart to this Amendment prior to 12:00 Noon (New York City time) on March
25, 2003, an amendment fee equal to 1.0% of such Lender's Tranche A Loan
Exposure calculated giving effect to the reduction in Tranche A Commitments
effected by this Amendment.
3.3 Payment of Expenses. Borrowers shall have paid in full all
outstanding statements for fees and expenses of O'Melveny & Xxxxx LLP and
Ernst & Young Corporate Finance LLC, to the extent submitted to Company
prior to 12:00 Noon (New York City time) on March 24, 2003.
3.4 Financial Projections. Borrowers shall have delivered to Agents
projected financial statements for Company and its Subsidiaries for the second
and third Fiscal Quarters of 2003, such projected financial statements to (i) be
prepared on a consolidated and consolidating basis in accordance with GAAP, (ii)
be in form and substance reasonably satisfactory to Agents, and (iii) contain
projections of cash flows for each such period and such other financial
information and projections for such periods as Agents may reasonably request.
3.5 Bankruptcy Court Approval. The Bankruptcy Court shall have
approved this Amendment and the payment of the fees required hereunder pursuant
to an order in form and substance satisfactory to Agents.
SECTION 4. BORROWERS' REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, Borrowers represent
and warrant to each Lender that the following statements are true, correct and
complete:
4.1 Corporate Power and Authority. Subject to compliance with the
Final Borrowing Order and any applicable provisions of the Bankruptcy Code,
each Loan Party has all requisite corporate power and authority to enter
into this Amendment and to carry out the transactions contemplated by, and
perform its obligations under, the Credit Agreement and the Security
Agreement as amended by this Amendment (collectively, the "Amended Agreements").
4.2 Authorization of Agreements. The execution and delivery of this
Amendment have been duly authorized by all necessary corporate action on
the part of each Loan Party and the performance of the Amended Agreements
has been duly authorized by all necessary corporate action on the part of
each Loan Party.
4.3 No Conflict. The execution and delivery by each Loan Party of this
Amendment and the performance by each Borrower of the Amended Agreements 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 (which Contractual Obligation is
enforceable on a post-Petition Date basis) of Company or any of its
Subsidiaries or an applicable order of the Bankruptcy Court, (iii) result
in or require the creation or imposition of any Lien upon any of the
properties or assets of Company or any of its Subsidiaries, or (iv) require
any approval of stockholders or any approval or consent of any Person under
any Contractual Obligation of Company or any of its Subsidiaries.
4.4 Governmental Consents. The execution and delivery by each Loan
Party of this Amendment and the performance by each Loan Party of the
Amended Agreements do not and will not require any Governmental
Authorization.
4.5 Binding Obligation. This Amendment has been duly executed and
delivered by each Loan Party, and each of this Amendment and the Amended
Agreements is the legally valid and binding obligations of each Loan Party
enforceable against each Loan 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.
4.6 Incorporation of Representations and Warranties From Credit
Agreement. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Sixth Amendment Effective Date to the same extent
as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in
which case they were true, correct and complete in all material respects on
and as of such earlier date.
4.7 Notice to Committee. Notice of this Amendment has been given to
and received by counsel to the official committee of unsecured creditors in
the Chapter 11 Cases and the informal committee of holders of Company's
9.25% Debentures.
4.8 Absence of Default. As of the date hereof after giving effect
hereto, there exists no Event of Default or Potential Event of Default
under the Credit Agreement.
SECTION 5. ACKNOWLEDGEMENT AND CONSENT
Each Borrower and Subsidiary Guarantor hereby (i) acknowledges
that such Loan Party has read this Amendment and consents to the terms hereof
and further hereby confirms and agrees that, notwithstanding the effectiveness
of this Amendment, the obligations of such Loan Party under each of the Loan
Documents to which such Loan Party is a party shall not be impaired and each of
the Loan Documents to which such Loan Party is a party are, and shall continue
to be, in full force and effect and are hereby confirmed and ratified in all
respects, (ii) ratifies and confirms the effectiveness of the First Amendment,
the Second Amendment, the Third Amendment, the Fourth Amendment and the Fifth
Amendment in all respects, and (iii) confirms that the provisions of the First
Amendment, the Second Amendment the Third Amendment, the Fourth Amendment and
the Fifth Amendment are binding on each of the Borrowers.
SECTION 6. MISCELLANEOUS
6.1 Reference to and Effect on the Credit Agreement and the Other
Loan Documents.
A. On and after the Sixth Amendment Effective Date, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of like import referring to the Credit Agreement, and each reference in
the other Loan Documents to the "Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement shall mean and be a
reference to the Credit Agreement as amended by this Amendment. On and after the
Sixth Amendment Effective Date, each reference in the Security Agreement to
"this Agreement", "hereunder", "hereof", "herein" or words of like import
referring to the Security Agreement, and each reference in the other Loan
Documents to the "Security Agreement", "thereunder", "thereof" or words of like
import referring to the Security Agreement shall mean and be a reference to the
Security Agreement as amended by this Amendment.
B. Except as specifically amended by this Amendment, the Credit
Agreement, the Security Agreement and the other Loan Documents shall remain in
full force and effect and are hereby ratified and confirmed.
C. The execution, delivery and performance of this Amendment shall
not constitute a waiver of any provision of, or operate as a waiver of any
right, power or remedy of any Agent or any Lender under, the Credit Agreement or
any of the other Loan Documents.
6.2 Fees and Expenses. Each Borrower acknowledges that all costs, fees
and expenses as described in subsection 10.2 of the Credit Agreement
incurred by Administrative Agent, Documentation Agent or the Lenders and
their respective counsel (including, without limitation, O'Melveny & Xxxxx
LLP and Ernst & Young Corporate Finance LLC) with respect to this Amendment
and the documents and transactions contemplated hereby shall be for the
account of Borrowers.
6.3 Headings. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
6.4 Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
6.5 Counterparts; Effectiveness. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment (other than Section
1 hereof, the effectiveness of which shall be governed by Section 3) shall
become effective upon the first date on which: (i) Borrowers, each Subsidiary
Guarantor and Lenders constituting Supermajority Tranche A Lenders and Requisite
Lenders shall have each executed a counterpart hereof, and (ii) Company,
Administrative Agent and Documentation Agent shall have received written or
telephonic notification of such execution and authorization of delivery of such
counterparts.
[Remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWERS:
COVANTA ENERGY CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxx
Authorized Officer
Each of the entities named on Schedule
A annexed hereto, as Borrowers
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxx
Authorized Officer
Each of the entities named on Schedule
B annexed hereto, as Borrowers
By: /s/ Xxxxx Xxxxxx
----------------------------------
Xxxxx Xxxxxx
Authorized Officer
SUBSIDIARY GUARANTORS:
Each of the entities named on Schedule
C annexed hereto, as Subsidiary
Guarantors
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxx
Authorized Officer
Each of the entities named on Schedule
D annexed hereto, as Subsidiary
Guarantors
By: /s/ Xxxxx Xxxxxx
----------------------------------
Xxxxx Xxxxxx
Authorized Officer
AGENTS AND LENDERS:
BANK OF AMERICA, N.A.,
as Administrative Agent and
Co-Arranger and as a Lender
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxx
Managing Director
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Documentation Agent and Co-Arranger
and as a Lender
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Xxxxx X. Xxxxx
Director
By: /s/ Xxxx X. Xxxxx
----------------------------------
Xxxx X. Xxxxx, Managing Director
Head of Workout
BAYERISCHE HYPO-UND VEREINSBANK AG,
as a Lender
By: /s/ Xxxxxxxxx Xxxxxxxx
----------------------------------
Name: Xxxxxxxxx Xxxxxxxx
Title: Director
By: /s/ Xxxx Xxxxxxx
----------------------------------
Name: Xxxx Xxxxxxx
Title: Director
COMMERZBANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES,
as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
By: /s/ Xxxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Senior Vice President
CREDIT LYONNAIS NEW YORK BRANCH,
as a Lender
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
FLEET NATIONAL BANK
By: /s/ Xxxx X. Xxxx, II
----------------------------------
Name: Xxxx X. Lucy, II
Title: Vice President
HSBC BANK USA,
as a Lender
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Name: Xxxxx X. Xxxxx
Title: HSBC Bank USA
Vice President
JPMORGAN CHASE BANK
(formerly known as The Chase Manhattan
Bank), as a Lender
By: /s/ Xxxxxxx Lancia
----------------------------------
Name: Xxxxxxx Lancia
Title: Vice President
IIB BANK LTD, IFSC BRANCH
as a Lender
By: /s/ Xxxxx Xxxxx
----------------------------------
Name: Xxxxx Xxxxx
Title:
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Title: Authorized Signatory
LANDESBANK HESSEN-THURINGEN
GIROZENTRALE,
as a Lender
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
Corporate Finance Division
Structured Finance Dept.
By: /s/ Xxxx Xxxxxxxxxxx
----------------------------------
Name: Xxxx Xxxxxxxxxxx
Title: Assistant Vice President
Corporate Finance Division
Structured Finance Dept.
BANC OF AMERICA SECURITIES LLC,
as Agent for BANK OF AMERICA, N.A.,
as a Lender
By: /s/ Xxxxxxx Xxxx
----------------------------------
Name: Xxxxxxx Xxxx
Title: Managing Director
SUNTRUST BANK,
as a Lender
By: /s/ Xxxxxx X. Ways
----------------------------------
Name: Xxxxxx X. Ways
Title: Managing Director
THE BANK OF NEW YORK
as a Lender
By: /s/ Xxxxx X. Xxxx
----------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
THE BANK OF NOVA SCOTIA,
as a Lender
By: /s/ Xxxxxx X. Xxxxxxxxxxx, Xx.
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx, Xx.
Title: Director
SPECIAL SITUATIONS INVESTING GROUP,
INC., as a Lender
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
UBS AG, STAMPORD BRANCH
as a Lender
By: /s/ Xxxxx Xxxxx
----------------------------------
Name: Xxxxx Xxxxx
Title: Director
Recovery Management
By: /s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Executive Director
WESTLB AG (formerly known as
Westdeutsche Landesbank Girozentrale),
NEW YORK BRANCH
as a Lender
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Director
By: /s/ Xxxxxxxxx Xxxxxxxxxx
----------------------------------
Name: Xxxxxxxxx Xxxxxxxxxx
Title: Managing Director
Credit Department
XXXXXXX XXXXX, XXXXXX & XXXXX
INCORPORATED, as a Lender
By: /s/ Xxxxx Xxxxx
----------------------------------
Name: Xxxxx Xxxxx
Title: Managing Director
Schedule A
Other Borrowers
1. AMOR 14 Corp.
2. Covanta Acquisition, Inc.
3. Covanta Alexandria/Arlington, Inc.
4. Covanta Babylon, 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 Resource Corp.
11. Covanta Energy Sao Xxxxxxxx, Inc.
12. Covanta Energy Services, Inc.
13. Covanta Energy West, Inc.
14. Covanta Engineering Services, Inc.
15. Covanta Fairfax, Inc.
16. Covanta Financial Services, Inc.
17. Covanta Geothermal Operations Holdings, Inc.
18. Covanta Geothermal Operations, Inc.
19. Covanta Heber Field Energy, Inc.
20. Covanta Hennepin Energy Resource Co., L.P.
21. Covanta Hillsborough, Inc.
22. Covanta Honolulu Resource Recovery Venture
23. Covanta Huntington Limited Partnership
24. Covanta Huntington Resource Recovery One Corp.
25. Covanta Huntington Resource Recovery Seven Corp.
26. Covanta Huntington, Inc.
27. Covanta Huntsville, Inc.
28. Covanta Hydro Energy, Inc.
29. Covanta Hydro Operations West, Inc.
30. Covanta Hydro Operations, Inc.
31. Covanta Imperial Power Services, Inc.
32. Covanta Indianapolis, Inc.
33. Covanta Kent, Inc.
34. Covanta Key Largo, Inc.
35. Covanta Lake, Inc.
36. Covanta Lancaster, Inc.
37. Covanta Xxx, Inc.
38. Covanta Long Island, Inc.
39. Covanta Xxxxxx Land Corp.
40. Covanta Xxxxxx, Inc.
41. Covanta Mid-Conn., Inc.
42. Covanta Xxxxxxxxxx, Inc.
43. Covanta New Martinsville Hydro-Operations Corp.
44. Covanta Northwest Puerto Rico, Inc.
45. Covanta Oahu Waste Energy Recovery, Inc.
46. Covanta Oil & Gas, Inc.
47. Covanta Onondaga Five Corp.
48. Covanta Onondaga Four Corp.
49. Covanta Onondaga Limited Partnership
50. Covanta Onondaga Operations, Inc.
51. Covanta Onondaga Three Corp.
52. Covanta Onondaga Two Corp.
53. Covanta Onondaga, Inc.
54. Xxxxx Services Corporation
55. Covanta Operations of Union LLC
56. Covanta OPW Associates, Inc.
57. Covanta OPWH, Inc.
58. Covanta Pasco, Inc.
59. Covanta Plant Services of New Jersey, Inc.
60. Covanta Power Development of Bolivia, Inc.
61. Covanta Power Development, Inc.
62. Covanta Power Equity Corp.
63. Covanta Projects of Hawaii, Inc.
64. Covanta Projects of Wallingford, LP
65. Covanta RRS Holdings, Inc.
66. Covanta Secure Services USA, Inc.
67. Covanta Secure Services, Inc.
68. Covanta SIGC Energy II, Inc.
69. Covanta SIGC Energy, Inc.
70. Covanta SIGC Geothermal Operations, Inc.
71. Covanta Stanislaus, Inc.
72. Covanta Systems, Inc.
73. Covanta Tampa Bay, Inc.
74. Covanta Tulsa, Inc.
75. Covanta Union, Inc.
76. Covanta Wallingford Associates, Inc.
77. Covanta Xxxxxx Energy Resources Co., LP
78. Covanta Waste Solutions, Inc.
79. Covanta Waste to Energy of Italy, Inc.
80. Covanta Waste to Energy, Inc.
81. Covanta Water Holdings, Inc.
82. Covanta Water Systems, Inc.
83. Covanta Water Treatment Services, Inc.
84. DSS Environmental, Inc.
85. ERC Energy II, Inc.
86. ERC Energy, Inc.
87. Heber Field Company
88. Heber Field Energy II, Inc.
89. Heber Geothermal Company
90. Heber Loan Partners
91. J.R. Jacks Construction Corp.
92. Xxxxx Constructors, Inc.
93. Xxxxx Environmental & Energy Services Co., Inc.
94. OPI Quezon, Inc.
95. Second Imperial Geothermal Co., L.P.
96. Three Mountain Operations, Inc.
97. Three Mountain Power LLC
Schedule B
Other Borrowers
1. Xxxxx Facility Management Corporation of Anaheim
2. LaGuardia Fuel Facilities Corp.
3. Lenzar Electro-Optics, Inc.
4. Newark Automotive Fuel Facilities Corporation, Inc.
5. Xxxxx Allied Abatement & Decontamination Service, Inc.
6. Xxxxx Allied Maintenance Corp.
7. Xxxxx Allied Payroll Services, Inc.
8. Xxxxx Attractions, Inc.
9. Xxxxx Aviation Distributing Corp.
10. Xxxxx Aviation Fueling Company of Virginia, Inc.
11. Xxxxx Aviation Service Company of Colorado, Inc.
12. Xxxxx Aviation Service Company of New Jersey, Inc.
13. Xxxxx Aviation Service Company of New York, Inc.
14. Xxxxx Aviation Service Company of Pennsylvania, Inc.
15. Xxxxx Aviation Service International Corporation
16. Xxxxx Aviation, Inc.
17. Xxxxx Cargo Spain, Inc.
18. Xxxxx Central and South America, Inc.
19. Xxxxx Facility Holdings, Inc.
20. Xxxxx Film and Theatre, Inc.
21. Xxxxx Firehole Entertainment Corp.
22. Xxxxx International Europe, Inc.
23. Xxxxx New York Services, Inc.
24. Xxxxx Support Services, Inc.
25. PA Aviation Fuel Holdings, Inc.
26. Philadelphia Fuel Facilities Corporation
Schedule C
Subsidiary Guarantors
1. Covanta Energy Group, Inc.
2. Covanta Energy International, Inc.
3. Covanta Equity of Stanislaus, Inc.
4. Covanta Haverhill Properties, Inc.
5. Covanta Haverhill, Inc.
6. Covanta Omega Lease, Inc.
7. Covanta Power International Holdings, Inc.
8. Covanta Projects, Inc.
9. Haverhill Power, Inc.
10. LMI, Inc. 11. Michigan Waste Energy, Inc.
12. OFS Equity of Alexandria/Arlington, Inc.
13. OFS Equity of Babylon, Inc.
14. OFS Equity of Delaware, Inc.
15. OFS Equity of Huntington, Inc.
16. OFS Equity of Indianapolis, Inc.
17. OFS Equity of Stanislaus, Inc.
18. Xxxxx Management Services, Inc.
19. Covanta Equity of Alexandria/Arlington, Inc.
Schedule D
Subsidiary Guarantors
1. Xxxxx Technology Services Corporation
2. Xxxxx Transition Corporation
ANNEX A
EXHIBIT XVI
MONTHLY BUDGET
See attached.
ANNEX B
EXHIBIT XVII
FORM OF OVERHEAD REPORT
See attached.
ANNEX C
SCHEDULE 3.1A(I)
TRANCHE A LETTER OF CREDIT OBLIGATIONS
See Attached.
Schedule 3.1A(i)
COVANTA ENERGY CORPORATION
Tranche A Letter of Credit Obligations
(amounts in millions)
I. Additional L/C
Requirements
Project Business Purpose L/C Amount Comments Tranche
Corporate Corporate Workers Comp $2.600 Bonding required for workers' comp A
going forward
Haripur IPP-East O&M/PPA Guarantee $0.6765 Requirement at discretion of project A
(Bangladesh) participants
Koma Kulshan IPP-West PPA Guarantee $0.500 PPA L/C for the benefit of Puget Sound A
Hennepin WTE Lease Reserve $2.098 Annual step-up requirement
Hennepin WTE Lease Reserve $2.098 Annual step-up requirement
Corporate Corporate Workers Comp $3.000 Bonding required for workers' comp A
going forward
II. Other L/Cs Required
Project Business Purpose L/C Amount Comments Tranche
See Comments See Comments See Comments $1.2275 For bonding requirements and A
performance collateral at energy
projects (such as additional
requirement at Quezon Project),
replacement of various bonds at
Projects, bonds for installation of
DSS equipment, bidding on additional
waste contracts, and similar
purposes. Up to $500,000 of the
foregoing L/C Amount may be utilized
for bonding required for workers'
comp going forward
Annex D
Extended Letters of Credit
--------------------------------------------------------------------------------------------------------------------
Original Extended
Project/Purpose Type Issuing Lender Amount Expiration Date Expiration Date
--------------------------------------------------------------------------------------------------------------------
Hennepin Standby Bank of America $2,098,000 04/01/03 9/30/03
(Step-Up)
--------------------------------------------------------------------------------------------------------------------
Workers Compensation Standby DKB $14,951,617 04/01/03 09/30/03
--------------------------------------------------------------------------------------------------------------------
Workers Compensation Standby DKB $7,520,423 04/01/03 09/30/03
--------------------------------------------------------------------------------------------------------------------
Hennepin Standby Commerzbank $18,880,552 03/28/03 09/30/03
--------------------------------------------------------------------------------------------------------------------
Hennepin Standby Bank of America $4,195,678 04/01/03 04/01/04
(Step-Up)
--------------------------------------------------------------------------------------------------------------------
Quezon DSR Standby Bank of America $11,802,039 04/01/03 04/01/04
--------------------------------------------------------------------------------------------------------------------
Greenway Standby Chase $820,000 05/31/03 05/31/04
--------------------------------------------------------------------------------------------------------------------
LICA Standby Bank of America $300,000 04/01/03 04/01/04
--------------------------------------------------------------------------------------------------------------------
Detroit Standby UBS $155,370,953 05/01/03 05/01/04
--------------------------------------------------------------------------------------------------------------------
Workers Compensation Standby First Union $8,465,297 08/31/03 8/31/04
--------------------------------------------------------------------------------------------------------------------
Workers Compensation Standby Huntington $7,500,093 05/31/03 05/31/04
--------------------------------------------------------------------------------------------------------------------
Fairfax Standby SunTrust $900,000 06/01/03 06/01/04
--------------------------------------------------------------------------------------------------------------------
ANNEX E
Additional Designated Non-Material Asset Sales
---------------------------------------------------------------------------------------------
ASSET DESCRIPTION
---------------------------------------------------------------------------------------------
Xxxxx Entertainment Services (Asia Pacific) Sale of shares in this entity held by Xxxxx
Pty. Ltd., which owns common and preferred Transition Corporation.
shares of Xxxxx International Facilities
Corporation Pty. Ltd.
---------------------------------------------------------------------------------------------
Transair Sale of Financiere Xxxxx and/or transfer of
Xxxxx International Europe, Inc.'s rights
under the "Return to Profitability" clause of
the Debt Waiver Agreement dated December 31,
1999 between Financiere Transair (currently
known as Financiere Xxxxx) and Xxxxx Holdings
B.V. (whose interests have now been assigned
to Xxxxx International Europe, Inc.).
---------------------------------------------------------------------------------------------
