EXHIBIT 10.29
CREDIT AGREEMENT
DATED AS OF MARCH 10, 2004
AMONG
COVANTA POWER INTERNATIONAL HOLDINGS, INC.
AND
EACH OF ITS SUBSIDIARIES PARTY HERETO,
THE LENDERS LISTED HEREIN,
AS LENDERS,
DEUTSCHE BANK AG, NEW YORK BRANCH
AS ADMINISTRATIVE AGENT
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........... 30
1.3 Other Definitional Provisions and Rules of Construction...................................... 31
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS............................................... 31
2.1 Commitments; Making of Loans; the Register; Optional Notes................................... 31
2.2 Interest on the Loans........................................................................ 34
2.3 Fees......................................................................................... 36
2.4 Repayments, Prepayments and Reductions in Commitments; General
Provisions Regarding Payments; Application of Proceeds of Collateral and
Payments Under CPIH Guaranty................................................................. 37
2.5 Use of Proceeds.............................................................................. 41
2.6 Special Provisions Governing Eurodollar Rate Loans........................................... 42
2.7 Increased Costs; Taxes; Capital Adequacy..................................................... 44
2.8 Statement of Lenders; Obligation of Lenders to Mitigate...................................... 47
2.9 Defaulting Lender............................................................................ 48
2.10 Joint and Several Liability; Payment Indemnifications........................................ 49
2.11 Rights of Subrogation, Contribution, Etc..................................................... 49
SECTION 3. CONDITIONS TO LOANS...................................................................... 50
3.1 Conditions to Closing Date................................................................... 50
3.2 Conditions to All Loans...................................................................... 59
SECTION 4. COMPANY'S REPRESENTATIONS AND WARRANTIES................................................. 60
4.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries................ 60
4.2 Authorization of Borrowing, etc.............................................................. 61
4.3 Financial Condition.......................................................................... 62
4.4 No Material Adverse Change; No Restricted Payments........................................... 63
4.5 Title to Properties; Liens; Real Property; Intellectual Property............................. 63
4.6 Litigation; Adverse Facts.................................................................... 64
4.7 Payment of Taxes............................................................................. 64
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TABLE OF CONTENTS
(continued)
PAGE
4.8 Performance of Agreements; Material Contracts................................................ 64
4.9 Governmental Regulation...................................................................... 65
4.10 Securities Activities........................................................................ 65
4.11 Employee Benefit Plans....................................................................... 65
4.12 Certain Fees................................................................................. 66
4.13 Environmental Protection..................................................................... 67
4.14 Employee Matters............................................................................. 67
4.15 Matters Relating to Collateral............................................................... 67
4.16 Disclosure................................................................................... 68
4.17 Cash Management System....................................................................... 69
4.18 Matters Relating to Loan Parties............................................................. 69
4.19 Investigation................................................................................ 70
4.20 Matters Relating to Bankruptcy Proceedings................................................... 70
4.21 Subordinated Indebtedness.................................................................... 71
4.22 Reporting to IRS............................................................................. 71
SECTION 5. COMPANY'S AFFIRMATIVE COVENANTS.......................................................... 71
5.1 Financial Statements and Other Reports....................................................... 71
5.2 Existence, etc............................................................................... 76
5.3 Payment of Taxes and Claims; Tax............................................................. 77
5.4 Maintenance of Properties; Insurance; Application of Net Insurance/ Condemnation Proceeds.... 77
5.5 Inspection Rights; Lender Meeting............................................................ 79
5.6 Compliance with Laws, etc.................................................................... 80
5.7 Environmental Matters........................................................................ 80
5.8 Execution of the Personal Property Collateral Documents After the Closing Date............... 82
5.9 Matters Relating to Real Property Collateral................................................. 82
5.10 Deposit Accounts; Repatriation of Foreign Cash............................................... 83
5.11 Further Assurances........................................................................... 83
5.12 Most Favored Nations Payments................................................................ 85
SECTION 6. BORROWERS' NEGATIVE COVENANTS............................................................ 85
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TABLE OF CONTENTS
(continued)
PAGE
6.1 Indebtedness................................................................................. 85
6.2 Liens and Related Matters.................................................................... 87
6.3 Investments; Acquisitions.................................................................... 89
6.4 Contingent Obligations; Performance Guaranties............................................... 91
6.5 Restricted Payments.......................................................................... 92
6.6 Financial Covenants.......................................................................... 93
6.7 Restriction on Fundamental Changes; Asset Sales.............................................. 93
6.8 Transactions with Shareholders and Affiliates................................................ 95
6.9 Restriction on Leases........................................................................ 96
6.10 [Intentionally Omitted]...................................................................... 96
6.11 Conduct of Business.......................................................................... 96
6.12 Amendments to Related Agreements, Debt Documentation and Organizational Documents............ 96
6.13 End of Fiscal Years; Fiscal Quarters......................................................... 97
6.14 Amendment to Pension Plans................................................................... 98
SECTION 7. EVENTS OF DEFAULT........................................................................ 98
7.1 Failure to Make Payments When Due............................................................ 98
7.2 Default in Other Agreements.................................................................. 98
7.3 Breach of Certain Covenants.................................................................. 99
7.4 Breach of Warranty........................................................................... 99
7.5 Other Defaults Under Loan Documents.......................................................... 99
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc......................................... 99
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc........................................... 100
7.8 Judgments and Attachments.................................................................... 100
7.9 Dissolution.................................................................................. 100
7.10 Employee Benefit Plans....................................................................... 100
7.11 Material Adverse Effect...................................................................... 101
7.12 Change in Control............................................................................ 101
7.13 Invalidity of Intercreditor Agreement; Failure of Security; Repudiation of Obligations....... 101
7.14 Termination of Material Contracts............................................................ 101
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TABLE OF CONTENTS
(continued)
PAGE
7.15 Default under Existing IPP International Project Guaranties.................................. 102
SECTION 8. ADMINISTRATIVE AGENT..................................................................... 102
8.1 Appointment.................................................................................. 102
8.2 Powers and Duties; General Immunity.......................................................... 103
8.3 Independent Investigation by Lenders; No Responsibility For Appraisal of Creditworthiness.... 104
8.4 Right to Indemnity........................................................................... 105
8.5 Successor Agents............................................................................. 105
8.6 Collateral Documents and Intercreditor Agreement............................................. 105
8.7 Administrative Agent May File Proofs of Claim................................................ 106
SECTION 9. MISCELLANEOUS............................................................................ 107
9.1 Successors and Assigns; Assignments and Participations in Loans.............................. 107
9.2 Expenses..................................................................................... 110
9.3 Indemnity.................................................................................... 111
9.4 Set-Off...................................................................................... 112
9.5 Ratable Sharing.............................................................................. 112
9.6 Amendments and Waivers....................................................................... 113
9.7 Independence of Covenants.................................................................... 114
9.8 Notices; Effectiveness of Signatures......................................................... 114
9.9 Survival of Representations, Warranties and Agreements....................................... 115
9.10 Failure or Indulgence Not Waiver; Remedies Cumulative........................................ 115
9.11 Marshalling; Payments Set Aside.............................................................. 116
9.12 Severability................................................................................. 116
9.13 Obligations Several; Independent Nature of Lenders' Rights; Damage Waiver.................... 116
9.14 Release of Security Interest................................................................. 116
9.15 Headings..................................................................................... 117
9.16 Applicable Law............................................................................... 117
9.17 Construction of Agreement.................................................................... 117
9.18 Consent to Jurisdiction and Service of Process............................................... 117
9.19 Waiver of Jury Trial......................................................................... 118
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TABLE OF CONTENTS
(continued)
PAGE
9.20 Confidentiality.............................................................................. 119
9.21 Release of Parties; Waivers.................................................................. 119
9.22 No Fiduciary Duty............................................................................ 120
9.23 Counterparts; Effectiveness.................................................................. 120
9.24 No Third Party Beneficiaries................................................................. 121
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EXHIBITS
I. FORM OF NOTE
II. FORM OF COMPLIANCE CERTIFICATE
III. FORM OF ASSIGNMENT AGREEMENT
IV. FORM OF NOTICE OF BORROWING
V. FORM OF NOTICE OF CONVERSION/CONTINUATION
VI. FORM OF OPINIONS OF LOAN PARTIES' COUNSEL
VII. FORM OF SECURITY AGREEMENT
VIII. FORM OF CEA Stock Pledge AgREEMENT
IX. FORM OF INTERCREDITOR AGREEMENT
X. FORM OF MORTGAGE
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SCHEDULES
1.1A PRINCIPAL LEASE, SERVICE AND OPERATING AGREEMENTS
1.1B BUDGET
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
3.1C CORPORATE STRUCTURE
3.1P CASH MANAGEMENT SYSTEM
4.1 COMPANY AND SUBSIDIARIES
4.5B REAL PROPERTY
4.5C INTELLECTUAL PROPERTY
4.6 LITIGATION
4.8A CERTAIN ALLEGED DEFAULTS
4.8C MATERIAL CONTRACTS
4.11 MATTERS RELATING TO EMPLOYEE BENEFIT PLANS
4.13 ENVIRONMENTAL MATTERS
4.14 EMPLOYEE MATTERS (BATAAN)
6.1(v) CERTAIN EXISTING INDEBTEDNESS
6.2 CERTAIN EXISTING LIENS
6.3(v) CERTAIN EXISTING INVESTMENTS
6.4(iii) CERTAIN EXISTING CONTINGENT OBLIGATIONS
6.6E STIPULATED ADJUSTED EBITDA
6.8 CERTAIN TRANSACTIONS WITH AFFILIATES
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COVANTA POWER INTERNATIONAL HOLDINGS, INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of March 10, 2004 and
entered into by and among COVANTA POWER INTERNATIONAL HOLDINGS, INC., a Delaware
corporation ("COMPANY" or "CPIH"); 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 (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 AG, NEW
YORK BRANCH ("DEUTSCHE BANK"), as administrative agent for Lenders (in such
capacity, "ADMINISTRATIVE AGENT" or "AGENT").
R E C I T A L S
WHEREAS, on April 1, 2002 (the "PETITION DATE"), Covanta
Energy Corporation, a Delaware corporation ("COVANTA"), and certain of its
Domestic Subsidiaries, including Borrowers (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, in connection with the Plan of Reorganization,
Borrowers have requested that certain of the Lenders provide priority secured
credit facilities on a post-bankruptcy basis on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Borrowers, Lenders and
Administrative Agent agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"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, minus (ii) the amount (expressed as a positive number) for
such period of "Minority interests", as each such line item referred to in
clause (i)(a) and clause (ii) is reflected in Company's consolidated statement
of income prepared
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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.
"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 8.5.
"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 a Project manager or operator),
whether through the ownership of voting securities or by contract or otherwise.
"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 8.5.
"AGGREGATE AMOUNTS DUE" has the meaning assigned to that term
in subsection 9.5.
"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.
"APPROVED FUND" means a Fund that is administered or managed
by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an
Affiliate of an entity that administers or manages a Lender.
"APPROVED PLAN OF REORGANIZATION" has the meaning assigned to
that term in subsection 3.1E.
"ASSET SALE" means (A) the sale by CEA of any of the Capital
Stock of Company to any Person or (B) 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 $250,000 or
less and the aggregate value of all such other assets since the Closing Date is
equal to $1,000,000 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 $2,000,000 in face value of accounts
receivable may be excluded from Asset Sales pursuant to this clause (1), and the
sole consideration received in
2
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 sale of shares in the Madurai Project
Entity permitted under subsection 6.7(vi).
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit III annexed hereto.
"ASSUMPTIONS" has the meaning assigned to that term in
subsection 4.11D.
"AVAILABLE CASH" has the meaning given to that term in
subsection 2.4A(iii).
"BANK OF AMERICA" means Bank of America, N.A.
"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.
"BASE RATE" means, at any time, the higher of (i) the Prime
Rate or (ii) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate. Any change in the Base Rate due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective on the effective date of
such change.
"BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.
"BASE RATE MARGIN" means a per annum rate equal to 7.00%.
"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 3.1G, setting forth projected cash receipts and expenditures for
Company and its Subsidiaries for each calendar
3
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, 2007, as such budget may be supplemented
pursuant to subsection 5.1(i), and (ii) with respect to each Fiscal Year after
2004, the budget delivered by Company to Lenders pursuant to subsection
5.1(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, 2007, as such budget may be
supplemented pursuant to subsection 5.1(i).
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New York or is a
day on which banking institutions located in such state are authorized or
required by law or other governmental action to close.
"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
Company and its Subsidiaries in the United States described in Schedule 3.1P
annexed hereto, as such Cash Management System may be modified pursuant to
subsection 5.10.
"CASH ON HAND" means, as of any date of determination, the
aggregate amounts on deposit in the Cash Management System in the United States
as of the close of business on the preceding Business Day.
"CEA" means Covanta Energy Americas, Inc., a Delaware
corporation.
"CEA STOCK PLEDGE AGREEMENT" means the Pledge Agreement
executed and delivered by CEA on the Closing Date, substantially in the form of
Exhibit VIII annexed hereto (it being understood that such Pledge Agreement
shall contain a covenant requiring CEA to pay to Collateral Agent any proceeds
received by it from or in connection with the sale of any of the common stock of
Company to any Person), as such Pledge Agreement may thereafter be amended,
restated, supplemented or otherwise modified from time to time.
"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 Covanta; (ii) Covanta shall cease to own, directly
or indirectly, 100% of the outstanding Capital Stock of CEA; (iii) CEA shall
cease to own, directly, 100% of the outstanding common stock of Company; or (iv)
the occurrence of a change in the composition of the Governing Body of
4
Company such that less than one of the members of such Governing Body is a
Continuing Member.
"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 3.1 have been satisfied or waived by Administrative
Agent and Requisite Lenders (or such other Lenders as may be required under
subsection 9.6).
"COLLATERAL" means, collectively, all of the real, personal
and mixed property (including Capital Stock) in which Liens are purported to be
granted pursuant to the Collateral Documents, as security for the Obligations.
"COLLATERAL 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 CEA
Stock Pledge Agreement, the Foreign Pledge Agreements, 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
Loan Party pursuant to this Agreement or any of the other Loan Documents, as
such instruments and documents may be amended, restated, supplemented or
otherwise modified from time to time.
"COMMITMENT" means the commitment of a Lender to make Loans to
Borrowers pursuant to subsection 2.1A, and "COMMITMENTS" means such commitments
of all Lenders in the aggregate.
"COMMITMENT FEE PERCENTAGE" means, on any date of
determination, a per annum rate equal to 0.50%.
"COMMODITIES AGREEMENT" means any long-term or forward
purchase contract or option contract to buy, sell or exchange commodities or
similar agreement or arrangement to which Company or any of its Subsidiaries is
a party unless, under the terms of such contract, option contract agreement or
arrangement Company expects to make or take delivery of the commodities which
are the subject thereof.
"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 II annexed hereto.
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"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,
Consolidated Interest Expense for such period to the extent 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.
"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 Non Recourse
Debt, and (ii) to the extent not included in the calculation of the amount
described in clause (i), all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing and net
costs under Interest Rate Agreements, but excluding, however, from clauses (i)
and (ii) any amounts referred to in subsection 2.3 payable to Administrative
Agent and Lenders on or before the Closing Date.
"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.
"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
6
any balance sheet item, level of income or financial condition of another if, in
the case of any agreement described under subclauses (1) or (2) of this
sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the amount
(if stated) of the obligation so guaranteed or otherwise supported or, if less,
the amount to which such Contingent Obligation is specifically limited, or, if
the amount of any Contingent Obligation is not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by
Company in good faith based upon reasonable assumptions. No obligations under
Performance Guaranties shall constitute Contingent Obligations.
"CONTINUING MEMBER" has the meaning assigned to that term in
the CPIH Term Loan Agreement.
"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 reimbursement agreement entered into by DHC and Covanta on
the Closing Date, as such agreement may be amended, restated, supplemented or
otherwise modified from time to time.
"COVANTA" has the meaning assigned to such term in the
recitals to this Agreement.
"CPIH" has the meaning assigned to that term in the
introduction to this Agreement.
"CPIH TERM LOAN AGREEMENT" means (i) that certain credit
agreement dated as of the date hereof by and among Borrowers, as borrowers, and
the other Persons 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 thereunder (provided, that (a) the terms of such credit
agreement, such Indebtedness so refinanced, replaced, renewed or extended shall
not be more disadvantageous to Company and its Subsidiaries and the Lenders (in
a manner deemed material by Administrative Agent or Requisite Lenders so
notifying Administrative Agent or Company)
7
than the CPIH Term Loan Agreement in effect on the Closing Date, (b) the
aggregate amount of Indebtedness outstanding, and additional commitments to
extend credit, if any, under the CPIH Term Loan Agreement as refinanced,
replaced, renewed or extended, shall not exceed the aggregate amount of the
commitments to extend credit in effect under the CPIH Term Loan Agreement on the
Closing Date, (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 CPIH Term Loan 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 6.12.
"CPIH TERM LOAN DOCUMENTS" means the "Loan Documents" as
defined in the CPIH Term Loan Agreement.
"CPIH TERM LOAN LENDERS" means the "Lenders" as defined in the
CPIH Term Loan Agreement.
"CPIH TERM LOAN EXPOSURE" means, with respect to any CPIH Term
Loan Lender as of any date of determination, the aggregate outstanding principal
amount of the CPIH Term Loans of that CPIH Term Loan Lender.
"CPIH TERM LOANS" means the loans made (or deemed made) by
CPIH Term Loan Lenders to Borrowers pursuant to subsection 2.1A of the CPIH Term
Loan Agreement.
"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 LOAN" has the meaning assigned to that term in
subsection 2.9.
"DEFAULT EXCESS" has the meaning assigned to that term in
subsection 2.9.
"DEFAULTING LENDER" has the meaning assigned to that term in
subsection 2.9.
"DEFAULT PERIOD" has the meaning assigned to that term in
subsection 2.9.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
similar account maintained with a Person engaged in the business of banking,
including a savings bank, savings and loan association, credit union or trust
company.
8
"DETROIT L/CS" means the letters of credit issued under the
Detroit L/C Credit Agreement on the Closing Date.
"DETROIT L/C CREDIT AGREEMENT" means (i) that certain credit
agreement dated as of the date hereof by and among Domestic Borrowers, as
borrowers, the Detroit L/C Lenders, as lenders, and Bank of America and Deutsche
Bank, as agents for such lenders, and (ii) any credit agreement entered into by
Domestic 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 as permitted pursuant to the New L/C Facility
Agreement, in each case as such credit agreement may be amended, restated,
supplemented or otherwise modified from time to time.
"DETROIT L/C LENDERS" means the "Lenders" under and as defined
in the Detroit L/C Credit Agreement.
"DEUTSCHE BANK" has the meaning assigned to that term in the
introduction to this Agreement.
"DHC" means Xxxxxxxxx Holding Corporation, a Delaware
corporation.
"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 Covanta 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.
"DISTRIBUTABLE CASH" has the meaning assigned to that term in
subsection 3.1T.
"DOLLARS" and the sign "$" mean the lawful money of the United
States.
"DOMESTIC BORROWERS" means Covanta and the Subsidiaries
thereof party from time to time to the Detroit L/C Credit Agreement and New L/C
Facility Agreement.
"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
9
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
Administrative Agent may agree on from time to time.
"DOMESTIC LOAN DOCUMENTS" means the "Credit Documents" as
defined in each of the Detroit L/C Credit Agreement and New L/C Facility
Agreement.
"DOMESTIC SUBSIDIARY" means any Subsidiary of any Borrower
that is incorporated or organized under the laws of the United States, any state
thereof or in the District of Columbia.
"ELIGIBLE ASSIGNEE" means (i) any Person that is (a) a
commercial bank organized under the laws of the United States or any state
thereof, (b) a savings and loan association or savings bank organized under the
laws of the United States or any state thereof, (c) a commercial bank organized
under the laws of any other country or a political subdivision thereof, provided
that (1) such bank is acting through a branch or agency located in the United
States or (2) such bank is organized under the laws of a country that is a
member of the Organization for Economic Cooperation and Development or a
political subdivision of such country, or (d) any other financial institution
that extends credit or buys loans as one of its businesses; (ii) any Person that
is a Lender at the time of the relevant assignment; or (iii) any other Person
designated as an Eligible Assignee pursuant to the prior written consent of
Administrative Agent in their sole discretion; provided that neither 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.
"EMPLOYMENT AGREEMENTS" means those employment agreements
entered into on the Closing Date by Company with such Persons as Agent shall
approve prior to the Closing Date, in each case providing for the exclusive
employment of such Persons by Company and its Subsidiaries, in the form provided
to Administrative Agent pursuant to subsection 3.1C on or prior to the Closing
Date.
10
"ENFORCING LENDERS" has the meaning assigned to that term in
subsection 9.5B.
"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 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 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
11
sponsors or the termination of any such Pension Plan resulting in material
current liability 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 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.
"EURODOLLAR RATE" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum that is the higher of (x) the rate obtained by dividing (i) the rate per
annum (rounded upward to the nearest 1/16 of one percent) that appears on the
Dow Xxxxx Markets (Telerate) page 3750 (or such other comparable page as may, in
the opinion of Administrative Agent, replace such page for the purpose of
displaying such rate) with maturities comparable to such Interest Period as of
approximately 10:00 a.m. (London time) on such Interest Rate Determination Date
by (ii) a percentage equal to 100% minus the stated maximum rate of all reserve
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable on such Interest Rate Determination Date to any member bank
of the Federal Reserve System in respect of "Eurocurrency liabilities" as
defined in Regulation D (or any successor category of liabilities under
Regulation D); and (y) 2.00%.
"EURODOLLAR RATE LOANS" means Revolving Loans bearing interest
at rates determined by reference to the Eurodollar Rate as provided in
subsection 2.2A.
"EURODOLLAR RATE MARGIN" means a per annum rate equal to
8.00%.
12
"EVENT OF DEFAULT" has the meaning assigned to that term in
Section 7.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXISTING DETROIT L/CS" means, collectively, (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 certain Subsidiaries of Company 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 certain
Subsidiaries of Company under certain agreements relating to the Quezon Project,
and (iii) the existing guaranty by Covanta of certain Subsidiaries of Company
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.
"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 is 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.
"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 6.2A(iii) through (vi)) and (ii)
such Lien is the only Lien (other than Liens permitted pursuant to subsection
6.2) to which such Collateral is subject.
13
"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 CASH EQUIVALENTS" means, as at any date of
determination, (i) securities issued or directly and fully guaranteed by the
government of the country within which an Investment by Company or any of its
Subsidiaries has been or is being made and (ii) time deposits and certificates
of deposit of commercial banks having offices in such country, in each case with
a long term unsecured debt rating of at least equal to (a) the rating of the
relevant government, in the event that such government is rated below investment
grade by either Moody's or S&P, or when there is no Moody's or S&P rating of
such government, (b) investment grade in the event that the relevant government
is rated above investment grade by either Xxxxx'x or S&P, or (c) "A" or better
to the extent that the relevant government is rated better than "A" by either
Moody's or S&P, and (iii) such other securities as Company and Administrative
Agent may agree on from time to time.
"FOREIGN PLEDGE AGREEMENT" means each pledge agreement or
similar instrument governed by the laws of a country other than the United
States, executed on the Closing Date or from time to time thereafter in
accordance with subsection 5.8 by Company or any Domestic Subsidiary that owns
Capital Stock of one or more Foreign Subsidiaries organized in such country, in
form and substance satisfactory to Collateral Agent, as such Foreign Pledge
Agreement may be amended, restated, supplemented or otherwise modified from time
to time.
"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 00 Xxxx Xxxxxx, Xxx Xxxx, XX 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 2.10C.
"FUNDING DATE" means the date of funding of a Loan.
"FUNDING DEFAULT" has the meaning assigned to that term in
subsection 2.9.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, accounting principles generally accepted in
the United States set forth in opinions
14
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
Covanta 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 Covanta and its Subsidiaries of certain contracts related
to the Geothermal Business, in the case of both clauses (i) and (ii) occurring
prior to or concurrently with the consummation of the Plan of Reorganization.
"GOVERNING BODY" means the board of directors or other body
having the power to direct or cause the direction of the management and policies
of a Person that is a corporation, partnership, trust or limited liability
company.
"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.
"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.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of (a) "hazardous
wastes" or "mixed wastes" as defined in RCRA or in any other Environmental Law;
(b) "hazardous substances", "pollutants" or "contaminants" as defined in CERCLA
or in any other Environmental Law; (c) "chemical substances" or "mixtures" as
defined in TSCA or any other substance which is tested pursuant to TSCA or any
other Environmental Law, or the manufacture, processing, distribution, use or
disposal of which is regulated or prohibited pursuant to TSCA or any other
Environmental Law, including without limitation polychlorinated biphenyls and
electrical equipment which contains any oil or dielectric fluid containing
regulated concentrations of polychlorinated biphenyls; (d) "insecticides",
"fungicides", "pesticides" or "rodenticides" as defined in FIFRA or any other
Environmental Law; or (e) "infectious waste" or "biohazardous waste" as defined
in any Environmental Law; (ii) asbestos or any asbestos-containing materials;
(iii) urea formaldehyde foam insulation; (iv) any oil, petroleum, petroleum
fraction or petroleum derived substance; (v) any drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (vi) any flammable
15
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 the Detroit L/C Credit Agreement and New L/C
Facility Agreement, 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 the Detroit L/C Credit Agreement.
"HIGH YIELD NOTES" means (i) the $230,000,000 in aggregate
principal amount at maturity of 8.25% Senior Notes due 2010 of Covanta 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 the Detroit L/C Credit Agreement; provided, that the initial
principal amount (and issue price) of such High Yield Notes on the Closing Date
shall be $205,000,000.
"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
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)
16
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 Non Recourse Debt of such partnership or joint
venture.
"INDEMNIFIED LIABILITIES" has the meaning assigned to that
term in subsection 9.3.
"INDEMNITEE" has the meaning assigned to that term in
subsection 9.3.
"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 Agent.
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, software, know-how and processes used in or
necessary for the conduct of the business of Borrowers and their Subsidiaries as
currently conducted that are material to the condition (financial or otherwise),
business or operations of Borrowers and their Subsidiaries, taken as a whole.
"INTERCOMPANY MASTER NOTE" means a promissory note evidencing
Indebtedness of Company and each of its Subsidiaries which (a) to the extent the
Indebtedness evidenced thereby is owed to any Borrower, is pledged pursuant to
the Collateral Documents, and (b) to the extent the Indebtedness evidenced
thereby is owed by a Subsidiary of Company, is senior Indebtedness of such
Subsidiary (except to the extent that requiring such Indebtedness to be senior
would breach a contractual obligation binding on such Subsidiary), except that
any such Indebtedness owed by any Borrower to any Subsidiary which is not a
Borrower shall be subordinated in right of payment to the payment in full of the
Obligations pursuant to the terms of such note.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor
Agreement executed and delivered on the Closing Date by Borrowers, CEA, Lenders,
Administrative Agent, Collateral Agent, CPIH Term Loan Lenders, the agents under
the CPIH Term Loan Documents, in the form of Exhibit IX annexed hereto, as it
may thereafter be amended, restated, supplemented or otherwise modified from
time to time.
17
"INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, the last Business Day of each month, commencing on the first such
date to occur after the Closing Date, and (ii) with respect to any Eurodollar
Rate Loan, the last day of each Interest Period applicable to such Loan;
provided that in the case of each Interest Period of longer than one month
"Interest Payment Date" shall also include each date that is a multiple of one
month after the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which any Borrower or any of Subsidiary of
any Borrower is a party.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.
"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, or (v) Commodities Agreements not
constituting Hedge Agreements. 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, LLC, a
Delaware limited liability company, and Third Avenue Trust, on behalf of the
Third Avenue Value Fund Series.
"IP COLLATERAL" means, collectively, the Intellectual Property
that constitutes Collateral.
"IPP INTERNATIONAL BUSINESS" means the assets and operations
of the business of Covanta and its Subsidiaries referred to by Covanta 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
18
Volcan Project, the Bataan Project, the Magellan Project, the Xxxxx Project, the
Huantai Project, the Yanjiang Project and the Island Power Project.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form.
"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 9.1.
"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.
"LOAN" or "LOANS" means one or more of the Loans made by
Lenders pursuant to subsection 2.1A.
"LOAN DOCUMENTS" means this Agreement, the Notes, the
Collateral Documents, the Intercreditor Agreement and all amendments, waivers
and consents relating thereto.
"LOAN EXPOSURE" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Commitments, that
Lender's Commitment, and (ii) after the termination of the Commitments, the
aggregate outstanding principal amount of the Revolving Loans of that Lender.
"LOAN PARTY" means each Borrower and CEA, and "LOAN PARTIES"
means all such Persons, collectively.
"MADURAI PROJECT ENTITY" has the meaning assigned to that term
in subsection 6.7(vi).
"MAGELLAN SUBSIDIARY" means Magellan Cogeneration, Inc., a
Philippines corporation.
"MANAGEMENT SERVICES AND REIMBURSEMENT AGREEMENT" means the
management services and reimbursement agreement entered into by Company, Covanta
and certain of their respective Subsidiaries on the Closing Date, in form and
substance satisfactory to the Agent, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
thereunder and under subsection 6.12.
"MANDATORY PAYMENT" means any amount described in subsections
2.4A(iii)(a)-(e) to be applied as a prepayment of the Loans and/or the CPIH Term
Loans and/or a permanent reduction of the Commitments, as determined pursuant to
subsection 2.4A.
19
"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 Loan
Parties taken as a whole to perform, or of Administrative Agent or Lenders to
enforce, the Obligations.
"MATERIAL CONTRACT" means (i) the principal service or
operating agreement, if any, with respect to each waste-to-energy Project and
the principal power sales 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
1.1A annexed hereto, and (ii) any other contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Loan 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, 2007.
"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 Loan Party, substantially in the form of Exhibit X 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 5.9, an amendment to an existing Mortgage, in form
satisfactory to Administrative Agent, in either case as such security instrument
or amendment may be amended, restated, supplemented or otherwise modified from
time to time. "MORTGAGES" means all such instruments collectively, whether
executed as of or subsequent to the Closing Date.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan that is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
20
"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 (other than Loans)
that is (x) secured by a valid, enforceable and perfected Lien on the stock or
assets in question that is permitted under subsection 6.2 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 Loan Documents.
"NET DEPRECIATION AND AMORTIZATION EXPENSE" means, for any
period, the sum (expressed as a positive number) of (i) "Depreciation" for such
period plus (ii) "Amortization" for such period, as each such line item referred
to in clauses (i) and (ii) 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.
"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.
"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 of 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
21
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 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.
"NEW L/C FACILITY AGREEMENT" means (i) that certain credit
agreement dated as of the date hereof by and among the Domestic Borrowers, as
borrowers, and the Investor Parties and the other financial institutions listed
on the signature pages thereof, as lenders, and (ii) any credit agreement
entered into by Domestic 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 as permitted under the
Detroit L/C Credit Agreement, in each case as such credit agreement may be
amended, restated, supplemented or otherwise modified from time to time.
"9.25% DEBENTURES" means the "9.25% Debenture Claims" as such
term is defined in the Approved Plan of REORGANIZATION.
"NON 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.
"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.
"NOTES" means any promissory notes of Borrowers issued
pursuant to subsection 2.1E to evidence the Loans of any Lenders, substantially
in the form of Exhibit I annexed hereto, as they may be amended, restated,
supplemented or otherwise modified from time to time.
"NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit IV annexed hereto.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit V annexed hereto.
22
"OBLIGATIONS" means all obligations of every nature of Loan
Parties under the Loan Documents, including any liability of such Loan Party on
any claim arising out of or relating to the Loan 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 Loan Parties under the Loan 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 Loan 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 Loan Party under any Loan Document and (b) the obligation to reimburse any
amount in respect of any of the foregoing that Agent or any Lender, in its sole
discretion, may elect to pay or advance on behalf of such Borrower or other Loan
Party.
"OFFICER" means the president, chief executive officer, a vice
president, chief financial officer, treasurer, general partner (if an
individual), managing member (if an individual) or other individual appointed by
the Governing Body or the Organizational Documents of a corporation,
partnership, trust or limited liability company to serve in a similar capacity
as the foregoing.
"OFFICER'S CERTIFICATE" means, as applied to any Person that
is a corporation, partnership, trust or limited liability company, a certificate
executed on behalf of such Person by one or more Officers of such Person or one
or more Officers of a general partner or a managing member if such general
partner or managing member is a corporation, partnership, trust or limited
liability company; provided, that any Officer's Certificate delivered pursuant
to subsection 2.4A(iii)(g) or 5.1(v) shall be executed by a senior financial
officer of Company reasonably acceptable to Administrative Agent.
"ORGANIZATIONAL DOCUMENTS" means the documents (including
Bylaws, if applicable) pursuant to which a Person that is a corporation,
partnership, trust or limited liability company is organized.
"PARTICIPANT" means a purchaser of a participation in the
rights and obligations under this Agreement pursuant to subsection 9.1C.
"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.
23
"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 5.3;
(ii) statutory Liens of landlords, statutory Liens and
rights of set-off of banks, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed
by law, in each case incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and
that (in the case of any such amounts overdue for a period in excess of
5 days) are being contested in good faith by appropriate proceedings,
so long as (1) such reserves or other appropriate provisions, if any,
as shall be required by GAAP shall have been made for any such
contested amounts, and (2) in the case of a Lien with respect to any
portion of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral on account of
such Lien;
(iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure
the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts, performance
and return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money), so long as no
foreclosure, sale or similar proceedings have been commenced with
respect to any portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an
Event of Default under subsection 7.8;
(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
24
preceding clause (b), so long as the holder of such restriction or
encumbrance agrees to recognize the rights of such lessee or sublessee
under such lease;
(viii) Liens arising from filing UCC financing statements
relating solely to leases not prohibited by this Agreement;
(ix) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(x) any zoning or similar law or right reserved to or
vested in any governmental office or agency to control or regulate the
use of any real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the ordinary
course of business of Company and its Subsidiaries; and
(xii) licenses of Intellectual Property granted by Company
or any of its Subsidiaries in the ordinary course of business and not
interfering in any material respect with the ordinary conduct of the
business of Company or such Subsidiary.
Other Liens on assets of Borrowers and their Subsidiaries
permitted under this Agreement (which are not Permitted Encumbrances) are
described in subsection 6.2A.
"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 each of the Security Agreement and the CEA Stock Pledge 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
25
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
Approved Plan of Reorganization.
"PREPETITION UNSECURED CLAIMS" means "Parent and Holding
Company Unsecured Claims" that are "Allowed," as such terms are defined in the
Approved Plan of Reorganization.
"PRIME RATE" means the rate that Deutsche Bank 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. Deutsche Bank 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 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 all payments,
computations and other matters relating to the Commitment of any Lender or any
Loans deemed made by any Lender, the percentage obtained by dividing (i) the
Loan Exposure of that Lender by (ii) the aggregate Loan Exposure of all Lenders,
in any such case as the applicable percentage may be adjusted by
26
assignments permitted pursuant to subsection 9.1. 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.
"PUHCA" has the meaning assigned to that term in subsection
4.9.
"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, 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
2.1D.
"RELATED AGREEMENTS" means the CPIH Term Loan Documents, the
Management Services and Reimbursement Agreement, the Existing IPP International
Project Guaranties, and the 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 6.12.
"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.
"REQUISITE DIP LENDERS" means DIP Lenders having or holding
more than 50% of the aggregate credit exposure under the "Tranche A L/Cs" and
the "Tranche X X/Cs" (as such terms are defined in the DIP Credit Agreement).
27
"REQUISITE LENDERS" means Lenders having or holding more than
50% of the aggregate Loan Exposure of all Lenders; provided, however, that prior
to the Closing Date, for purposes of this definition, the Loan Exposure of each
Lender shall equal the original Commitment of such Lender on the Closing Date.
"RESTRICTED PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Indebtedness
of Company and its Subsidiaries other than (a) the Obligations, (b) Indebtedness
owed by a Subsidiary to a Borrower, (c) payments under the CPIH Term Loan
Agreement 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 Borrowers, 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.
"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
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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 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. Unless otherwise specified herein or unless the context
otherwise requires, any reference to a "Subsidiary" contained herein means a
Subsidiary of Company.
"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).
"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
3.1F(iv).
"TAX SHARING AGREEMENT" means the tax sharing agreement
entered into by DHC, Covanta and Company on the Closing Date, in form and
substance satisfactory to the Administrative Agent, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time to the
extent permitted under subsection 6.12.
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"TOTAL DEBT" means, as at any date of determination, (i) the
aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP, minus
(ii) the amounts of "Current portion of project debt" and "Project Debt",
whether such line items are so titled or otherwise titled, as such line items
are or would be reflected in Company's consolidated balance sheet as at such
date prepared in conformity with GAAP and reported in a manner consistent with
Company's reporting of such amounts in its quarterly or annual report (as the
case may be) on Form 10Q or 10K, respectively, prior to the Closing Date, minus
(iii) any portion of Indebtedness of Company and its Subsidiaries under the Tax
Sharing Agreement included in the amount described in clause (i) above.
"TOTAL UTILIZATION OF COMMITMENTS" means, as at any date of
determination, the aggregate principal amount of all outstanding Revolving
Loans.
"TREASURY REGULATIONS" means the Treasury Regulations
promulgated under the Internal Revenue Code.
"TSCA" means the Toxic Substances Control Act of 1976, as
amended (15 U.S.C. Section 2601 et seq.), or any successor statute, and all
implementing regulations promulgated thereunder.
"UBS BANK" means UBS AG, Stamford Branch.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"UNITED STATES" means the United States of America.
"UNSECURED CREDITOR NOTES" has the meaning assigned to that
term in subsection 3.1F(iv).
"UNSECURED CREDITOR NOTES INDENTURE" means the Indenture
pursuant to which the Unsecured Creditor Notes are issued.
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 5.1 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 5.1(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 4.3. If at any time any change in
GAAP would affect the computation of any financial ratio or requirement set
forth in any Loan Document, and Company, Administrative Agent or Requisite
Lenders shall so request,
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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 5.1(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 Loan 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. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; OPTIONAL NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrowers
herein set forth, each Lender severally agrees to lend to Borrowers, on a joint
and several basis, from time to time during the period from the Closing Date to
but excluding the Maturity Date an aggregate amount not exceeding its Pro Rata
Share of the aggregate amount of the Commitments to be used for the purposes
identified in subsection 2.5A. The original amount of each Lender's Commitment
is set forth opposite its name on Schedule 2.1 annexed hereto and the aggregate
original principal amount of the Commitments is $10,000,000; provided, however,
that the Commitments of Lenders shall be adjusted to give effect to any
assignments of the Commitments pursuant to subsection 9.1B and shall be reduced
from time to time by the amount of any reductions thereto made pursuant to
subsection 2.4. Each Lender's Commitment shall expire on the day before the
Maturity Date and all Loans and all other amounts owed hereunder with respect to
the Loans and the Commitments shall be paid in full no later than the Maturity
Date. Amounts borrowed under this subsection 2.1A may be repaid and reborrowed
up to but excluding the Maturity Date. Anything contained in this Agreement to
the contrary notwithstanding, in no event shall the Total Utilization of
Commitments at any time exceed the Commitments then in effect.
B. BORROWING MECHANICS. Loans made on any Funding Date shall
be in an aggregate minimum amount of $200,000 and integral multiples of $100,000
in excess of that amount (or, if the amount of the Commitments unfunded and
available for borrowing is less than such aggregate minimum amount, an amount
equal to the amount of the Commitments unfunded
31
and available for borrowing); provided that Loans made on any Funding Date as
Eurodollar Rate Loans with a particular Interest Period shall be in an aggregate
minimum amount of $500,000 and integral multiples of $200,000 in excess of that
amount. Whenever Borrowers desire that Lenders make Loans they shall deliver to
Administrative Agent a Notice of Borrowing no later than 10:00 A.M. (New York
City time) at least three Business Days in advance of the proposed Funding Date
(in the case of a Eurodollar Rate Loan) or at least one Business Day in advance
of the proposed Funding Date (in the case of a Base Rate Loan). Loans may be
continued as or converted into Base Rate Loans and Eurodollar Rate Loans in the
manner provided in subsection 2.2D. In lieu of delivering a Notice of Borrowing,
Borrowers may give Administrative Agent telephonic notice by the required time
of any proposed borrowing under this subsection 2.1B; provided that such notice
shall be promptly confirmed in writing by delivery of a duly executed Notice of
Borrowing to Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any
liability to any Borrower in acting upon any telephonic notice referred to above
that Administrative Agent believes in good faith to have been given by an
Officer of a Borrower or for otherwise acting in good faith under this
subsection 2.1B or under subsection 2.2D, and upon funding of Loans by Lenders,
and upon conversion or continuation of the applicable basis for determining the
interest rate with respect to any Loans pursuant to subsection 2.2D, in each
case in accordance with this Agreement, pursuant to any such telephonic notice
Borrowers shall have effected Loans or a conversion or continuation, as the case
may be, of Loans hereunder.
Borrowers shall notify Administrative Agent prior to the
funding of any Loans in the event that any of the matters to which Borrowers are
required to certify in the applicable Notice of Borrowing is no longer true and
correct as of the applicable Funding Date, and the acceptance by Borrowers of
the proceeds of any Loans shall constitute a re-certification by Borrowers, as
of the applicable Funding Date, as to the matters to which Borrowers are
required to certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Borrowing for, or a Notice of Conversion/Continuation for
conversion to, or continuation of, a Eurodollar Rate Loan (or telephonic notice
in lieu thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Borrowers shall be bound to make a borrowing or to
effect a conversion or continuation in accordance therewith.
Notwithstanding the foregoing provisions of this subsection
2.1B, no Eurodollar Rate Loans may be made and no Base Rate Loan may be
converted into a Eurodollar Rate Loan until the third Business Day after the
Closing Date.
C. DISBURSEMENT OF FUNDS. All Loans under this Agreement shall
be made by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that neither Administrative Agent nor any
Lender shall be responsible for any default by any other Lender in that other
Lender's obligation to make a Loan requested hereunder nor shall the Commitment
of any Lender to make a Loan requested be increased or decreased as a result of
a default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder. Promptly after receipt by Administrative Agent of a Notice
of Borrowing
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pursuant to subsection 2.1B (or telephonic notice in lieu thereof) or a notice
deemed to be a Notice of Borrowing pursuant to subsection 2.1B, Administrative
Agent shall notify each Lender of the proposed borrowing. Each such Lender shall
make the amount of its Loan available to Administrative Agent not later than
12:00 Noon (New York City time) on the applicable Funding Date, in same day
funds in Dollars, at the Funding and Payment Office. Upon satisfaction or waiver
of the conditions precedent specified in subsections 3.1 (in the case of Loans
made on the Closing Date) and 3.2 (in the case of all Loans), Administrative
Agent shall make the proceeds of such Loans available to Borrowers on the
applicable Funding Date by causing an amount of same day funds in Dollars equal
to the proceeds of all such Loans received by Administrative Agent from Lenders
to be credited to the account of Borrowers at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any
Lender prior to a Funding Date that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Borrowers a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Borrowers and Borrowers shall immediately pay such corresponding amount
to Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Borrowers may
have against any Lender as a result of any default by such Lender hereunder.
D. 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 9.3), 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 9.8 a register for the recordation of, and shall record, the names
and addresses of Lenders and the Commitment and Loans of each Lender from time
to time (the "REGISTER"). Borrowers, Administrative Agent and Lenders shall deem
and treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein for all
purposes hereof; all amounts owed with respect to any Commitment or Loan shall
be owed to the Lender listed in the Register as the owner thereof; and any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is listed in the Register as a
Lender shall be conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Commitments or Loans. Each Lender shall record
on its internal records the amount of its Loans and Commitments and each payment
in
33
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 Loans
or Commitments or any Obligations in respect of any Loans.
E. OPTIONAL NOTES. If so requested by any Lender by written
notice to Company (with a copy to Administrative Agent) at least two Business
Days prior to the Closing Date or at any time thereafter, Borrowers shall
execute and deliver to such Lender (and/or, if applicable and if so specified in
such notice, to any Person who is an assignee of such Lender pursuant to
subsection 9.1) on the Closing Date (or, if such notice is delivered after the
date which is two Business Days prior to the Closing Date, promptly after
Company's receipt of such notice) a promissory note or promissory notes to
evidence such Lender's Loan, substantially in the form of Exhibit I annexed
hereto, with appropriate insertions, including the principal amount of that
Lender's Commitment.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections
2.6 and 2.7, each Loan shall bear interest on the unpaid principal amount
thereof from the date made until repayment in full at a rate determined by
reference to the Base Rate or the Eurodollar Rate. The applicable basis for
determining the rate of interest with respect to any Loan shall be selected by
Borrowers initially at the time a Notice of Borrowing is given with respect to
such Loan pursuant to subsection 2.2B (subject to the last sentence of
subsection 2.1B), and the basis for determining the interest rate with respect
to any Loan may be changed from time to time pursuant to subsection 2.2B
(subject to the last sentence of subsection 2.1B). If on any day a Loan is
outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that day
that Loan shall bear interest determined by reference to the Base Rate. Subject
to the provisions of subsections 2.2E, 2.2G and 2.7, the Loans shall bear
interest through maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate
plus the Base Rate Margin; or
(ii) if a Eurodollar Rate Loan, then at the sum of the
Eurodollar Rate plus the Eurodollar Rate Margin.
B. INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, Borrowers may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall be
a one-, two-, three- or six-month period; provided that:
(i) the initial Interest Period for any Eurodollar Rate
Loan shall commence on the Funding Date in respect of such Loan, in the
case of a Loan initially made as a Eurodollar Rate Loan, or on the date
specified in the applicable Notice of Conversion/Continuation, in the
case of a Loan converted to a Eurodollar Rate Loan;
34
(ii) in the case of immediately successive Interest
Periods applicable to a Eurodollar Rate Loan continued as such pursuant
to a Notice of Conversion/Continuation, each successive Interest Period
shall commence on the day on which the next preceding Interest Period
expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Loans shall extend beyond the Maturity Date in effect at the
commencement of such Interest Period; and
(vi) there shall be no more than four Interest Periods
outstanding at any time.
C. INTEREST PAYMENTS. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Borrowers shall have the option (i) to convert at any time all
or any part of their outstanding Loans equal to $200,000 and integral multiples
of $100,000 in excess of that amount from Loans bearing interest at a rate
determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $500,000 and integral multiples of $200,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that a
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.
Borrowers shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). In lieu of delivering a Notice of
Conversion/Continuation Borrowers may give Administrative Agent telephonic
notice by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Administrative
Agent shall promptly notify each Lender of any Loan subject to the Notice of
Conversion/Continuation.
35
E. DEFAULT RATE. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of all
Loans and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is (i) in the case of Loans, 2.00% per annum
in excess of (a) the interest rate otherwise payable under this Agreement for
Base Rate Loans or (b) the interest rate otherwise payable under this Agreement
with respect to such Loans, if such Loans are Eurodollar Rate Loans, the
Interest Period in effect at the time of the relevant Event of Default has not
yet expired, and such interest rate otherwise payable with respect to such Loans
is greater than the interest rate otherwise payable under this Agreement for
Base Rate Loans, or (ii) in the case of fees and other amounts, 2.00% per annum
in excess of the interest rate otherwise payable under this Agreement for Base
Rate Loans. Payment or acceptance of the increased rates of interest provided
for in this subsection 2.2E is not a permitted alternative to timely payment and
shall not constitute a waiver of any Event of Default or otherwise prejudice or
limit any rights or remedies of Administrative Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans and other
amounts bearing interest with reference to the Base Rate shall be computed (i)
in the case of Base Rate Loans and other amounts bearing interest with reference
to the Base Rate, on the basis of a 365-day or 366-day year, as the case may be,
and (ii) in the case of Eurodollar Rate Loans, on the basis of a 360-day year,
in each case for the actual number of days elapsed in the period during which it
accrues. In computing interest on any Loan, the date of the making of such Loan
or the first day of an Interest Period applicable to such Loan or, with respect
to a Base Rate Loan being converted from a Eurodollar Rate Loan, the date of
conversion of such Eurodollar Rate Loan to such Base Rate Loan, as the case may
be, shall be included; and the date of payment of such Loan or the expiration
date of an Interest Period applicable to such Loan or, with respect to a Base
Rate Loan being converted to a Eurodollar Rate Loan, the date of conversion of
such Base Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be
excluded; provided that if a Loan is repaid on the same day on which it is made,
one day's interest shall be paid on that Loan.
G. MAXIMUM RATE. Notwithstanding the foregoing provisions of
this subsection 2.2, in no event shall the rate of interest payable by Borrowers
with respect to any Loan exceed the maximum rate of interest permitted to be
charged under applicable law.
2.3 FEES.
A. AGENCY FEE; FACILITY FEES. Borrowers, jointly and
severally, agree to pay to Administrative Agent (i) on the Closing Date and each
anniversary of the Closing Date (excluding the Maturity Date), for
Administrative Agent's own account and in advance for the forthcoming year, an
annual agency fee in an amount equal to $30,000 (which fee shall be fully earned
and non-refundable when due), and (ii) on the Closing Date, for distribution to
each Lender, a facility fee in an amount equal to 2.0% of the Commitment of such
Lender as of the Closing Date.
B. COMMITMENT FEES. Borrowers, jointly and severally, agree to
pay to Administrative Agent, for distribution to each Revolving Lender in
proportion to that Lender's
36
Pro Rata Share of the Commitments, commitment fees for the period from and
including the Closing Date to but excluding the Maturity Date equal to (i) the
daily excess of the Commitments over the Total Utilization of Commitments,
multiplied by (ii) the Commitment Fee Percentage then in effect, expressed as a
daily rate. Such commitment fees shall be payable in arrears on and to (but
excluding) the last day of each month and on the Maturity Date and computed on
the basis of a 360-day year, for the actual number of days elapsed.
C. OTHER FEES. Borrowers, jointly and severally, agree to pay
to Administrative Agent such fees in the amounts and at the times separately
agreed upon between Company and Administrative Agent. All fees referenced in
this subsection 2.3 shall be earned when payable and shall be non-refundable.
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN COMMITMENTS; GENERAL
PROVISIONS REGARDING PAYMENTS; APPLICATION OF PROCEEDS OF
COLLATERAL AND PAYMENTS UNDER CPIH GUARANTY.
A. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS.
(i) Voluntary Prepayments. Borrowers may, upon not less
than one Business Day's prior written or telephonic notice, in the case
of Base Rate Loans, and three Business Days' prior written or
telephonic notice, in the case of Eurodollar Rate Loans, in each case
given to Administrative Agent by 12:00 Noon (New York City time) on the
date required and, if given by telephone, promptly confirmed in writing
to Administrative Agent, who will promptly notify each Lender whose
Loans are to be prepaid of such prepayment, at any time and from time
to time prepay any Loans on any Business Day in whole or in part in an
aggregate minimum amount of $1,000,000 and integral multiples of
$500,000 in excess of that amount (or, if the amount of the Loans is
less than such aggregate minimum amount, an amount equal to the amount
of the Loans); provided that voluntary prepayments of Eurodollar Rate
Loans made on a date other than an Interest Payment Date applicable to
such Loan shall be subject to breakage fees, costs and expenses, if
any, in accordance with subsection 2.6D. Notice of prepayment having
been given as aforesaid, the principal amount of the Loans specified in
such notice shall become due and payable on the prepayment date
specified therein. Any such voluntary prepayment shall be applied as
specified in subsection 2.4A(iv).
(ii) Voluntary Reductions of Commitments. Borrowers may,
upon not less than one Business Day's prior written or telephonic
notice confirmed in writing to Administrative Agent, at any time and
from time to time, terminate in whole or permanently reduce in part,
without premium or penalty, the Commitments in an amount up to the
amount by which the Commitments exceed the aggregate Loans outstanding
at the time of such proposed termination or reduction; provided that
any such partial reduction of either the Commitments shall be in an
aggregate minimum amount of $1,000,000 and integral multiples of
$1,000,000 in excess of that amount. Borrowers' notice to
Administrative Agent (who shall promptly notify each Revolving Lender
of such notice) shall designate the date (which shall be a Business
Day) of such termination or reduction and the amount of any partial
reduction, and such termination or reduction of any of the Commitments
shall be effective on the date specified in Company's notice and
37
shall reduce the Commitment of each Lender proportionately to its Pro
Rata Share. No such voluntary reduction of the Commitments shall be
permitted if such reduction would result in the Commitments being less
than the Total Utilization of Commitments.
(iii) Mandatory Payments. Mandatory Payments shall be made
in the amounts and under the circumstances set forth below, all such
Mandatory Payments to be applied as set forth below or as more
specifically provided in subsection 2.4A(iv), except to the extent the
Intercreditor Agreement requires application thereof in a different
manner than as set forth in this subsection 2.4A(iii) or subsection
2.4A(iv):
(a) Net Asset Sale Proceeds. No later than two
days after the date of receipt by CEA, 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 the remaining amount of such Net
Asset Sale Proceeds.
(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 5.4C, 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 6.1(i) through (vii), 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) Excess Cash. If as of the last Business Day
of any calendar month the sum of (1) Cash On Hand (after
giving effect to the aggregate interest to be paid on such
date pursuant to subsection 2.2C) plus (2) the aggregate
Commitments minus (3) the Total Utilization of Commitments
(after giving effect to any voluntary repayment of outstanding
Loans to be made on such date that are made on such date)
exceeds $10,000,000, then Borrowers shall apply an amount
equal to such excess (provided, that, in the event that such
application would cause Cash On Hand to be less than
$6,000,000, then such excess amount so applied shall be
reduced such that Cash On Hand is not less than $6,000,000)
(the
38
amount so applied as it may be adjusted pursuant to the
foregoing proviso, "AVAILABLE CASH")) to the payment of
outstanding Term Loans.
(f) Prepayments Due to Reductions or
Restrictions of Commitments. Borrowers shall from time to time
prepay the Loans to the extent necessary to give effect to the
limitations set forth in the last sentence of subsection 2.1A.
Without limiting the preceding sentence, if at any time and
from time to time after the Closing Date the outstanding
principal amount of Loans shall exceed the Commitments then in
effect Borrowers shall promptly prepay Loans in an aggregate
amount equal to the amount of any such excess.
(g) Calculations of Net Proceeds Amounts;
Additional Prepayments and Reductions Based on Subsequent
Calculations. Concurrently with the receipt of any amount
which would require a Mandatory Payment pursuant to
subsections 2.4A(iii)(a) - (e), 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 or
Tax refund or rebate, as the case may be, that gave rise to
such Mandatory Payment. In the event that Company shall
subsequently determine that the actual amount was greater than
the amount set forth in such Officer's Certificate, Company
shall promptly make an additional Mandatory Payment in an
amount equal to the amount of such excess, and Company shall
concurrently therewith deliver to Administrative Agent an
Officer's Certificate demonstrating the derivation of the
additional amount resulting in such excess.
(iv) Application of Prepayments.
(a) Application of Prepayments. Except as
provided in subsection 2.4C and to the extent the
Intercreditor Agreement requires application of any Mandatory
Payment in a different manner than as set forth in this
sentence, (1) any voluntary prepayments pursuant to subsection
2.4A(i) shall be applied to repay outstanding Loans, and (2)
any Mandatory Payment made pursuant to subsections
2.4A(iii)(a) - (d) shall be applied to repay Loans and/or to
permanently reduce Commitments in accordance with the
provisions of the Intercreditor Agreement, and the application
of Mandatory Payments to Loans and/or Commitments required
under the terms of the Intercreditor Agreement shall apply as
if set forth herein.
(b) Application of Prepayments to Base Rate
Loans and Eurodollar Rate Loans. Any prepayment of Loans shall
be applied first to Base Rate Loans to the full extent thereof
before application to Eurodollar Rate Loans, in each case in a
manner which minimizes the amount of any payments required to
be made by Borrowers pursuant to subsection 2.6D.
(v) Application of Payments to Principal and Interest.
All payments in respect of the principal amount of any Loan shall
include payment of accrued interest on the
39
principal amount being repaid or prepaid, and all such payments (and,
in any event, any payments in respect of any Loan on a date when
interest is due and payable with respect to such Loan) shall be applied
to the payment of interest before application to principal.
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 Loans when due in accordance with the terms
hereof.
(ii) Application of Payments to Principal and Interest.
All payments in respect of the principal amount of any Loan shall
include payment of accrued interest on the principal amount being
repaid or prepaid, and all such payments (and, in any event, any
payments in respect of any Loan on a date when interest is due and
payable with respect to such Loan) shall be applied to the payment of
interest before application to principal.
(iii) Apportionment of Payments. Aggregate payments of
principal and interest shall be apportioned among all outstanding Loans
to which such payments relate, in each case proportionately to Lenders'
respective Pro Rata Shares. Administrative Agent shall promptly
distribute to each Lender, at its primary address set forth below its
name on the appropriate signature page hereof or at such other address
as such Lender may request, its Pro Rata Share of all such payments
received by Administrative Agent and the commitment fees of such
Lender, if any, when received by Administrative Agent pursuant to
subsection 2.3. Notwithstanding the foregoing provisions of this
subsection 2.4B(iii), if, pursuant to the provisions of subsection
2.6C, any Notice of Conversion/Continuation is withdrawn as to any
Affected Lender or if any Affected Lender makes Base Rate Loans in lieu
of its Pro Rata Share of any Eurodollar Rate Loans, Administrative
Agent shall give effect thereto in apportioning payments received
thereafter.
(iv) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment
fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), that
40
Lender will make a notation thereon of all Loans evidenced by that Note
and all principal payments previously made thereon and of the date to
which interest thereon has been paid; provided that the failure to make
(or any error in the making of) a notation of any Loan made under such
Note shall not limit or otherwise affect the Obligations of Borrowers
hereunder or under such Note with respect to any Loan or any payments
of principal or interest on such Note.
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 2.4C,
upon the occurrence and during the continuation of an Event of Default, either
if requested by Requisite Lenders or upon termination of the Commitments (a) all
Mandatory Payments or other payments received on account of the Obligations,
whether from any Borrower, or otherwise, shall be applied by Administrative
Agent against the Obligations and (b) all proceeds received by Administrative
Agent in respect of any sale of, collection from, or other realization upon all
or any part of the Collateral may, in the discretion of Administrative Agent, be
held by Administrative Agent as Collateral for, and/or (then or at any time
thereafter) applied in full or in part by Administrative Agent against, the
applicable Secured Obligations (as defined in the Collateral Documents), in each
case in the following order of priority:
(i) to the payment of all costs and expenses of such
sale, collection or other realization, all other expenses, liabilities
and advances made or incurred by Administrative Agent in connection
therewith, and all amounts for which Administrative Agent is entitled
to compensation (including the fees described in subsection 2.3),
reimbursement and indemnification under any Loan Document and all
advances made by Administrative Agent thereunder for the account of the
applicable Loan Party, and to the payment of all costs and expenses
paid or incurred by Administrative Agent in connection with the Loan
Documents, all in accordance with subsections 8.4, 9.2 and 9.3 and the
other terms of this Agreement and the Loan Documents;
(ii) thereafter, to the extent of any excess such
proceeds, to the payment of all Obligations, for the ratable benefit of
the holders thereof (subject to the provisions of subsection 2.4B(ii)
hereof); and
(iii) thereafter, to the extent of any excess such
proceeds, to the payment to or upon the order of such Loan Party or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
2.5 USE OF PROCEEDS.
A. LOANS. The proceeds of any Loans shall be applied by
Borrowers to fund working capital requirements and general corporate purposes
relating to Borrowers' post-Closing Date operations and other expenditures;
provided that no portion of the Loans shall be used, directly or indirectly, to
(a) finance or make any Restricted Payment or other payment or prepayment
prohibited under subsection 6.5, or (b) make any payment or prepayment
(including by way of an Investment) to any Person that is otherwise prohibited
under this Agreement.
41
Borrowers shall use the entire amount of the proceeds of each Loan in accordance
with this subsection 2.5A.
B. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by any Borrower or any Subsidiary
of any Borrower in any manner that might cause the borrowing or the application
of such proceeds to violate Regulation U, Regulation T or Regulation X of the
Board of Governors of the Federal Reserve System or any other regulation of such
Board or to violate the Exchange Act, in each case as in effect on the date or
dates of such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. On each Interest
Rate Determination Date, Administrative Agent shall determine in accordance with
the terms of this Agreement (which determination shall, absent manifest error,
be conclusive and binding upon all parties) the interest rate that shall apply
to the Eurodollar Rate Loans for which an interest rate is then being determined
for the applicable Interest Period and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to Borrowers and each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the
event that Administrative Agent shall have determined (which determination shall
be conclusive and binding upon all parties hereto) on any Interest Rate
Determination Date that by reason of circumstances affecting the interbank
Eurodollar market adequate and fair means do not exist for ascertaining the
interest rate applicable to such Loans on the basis provided for in the
definition of Eurodollar Rate, Administrative Agent shall on such date give
notice (by telefacsimile or by telephone confirmed in writing) to Borrowers and
each Lender of such determination, whereupon (i) no Loans may be made as, or
converted to, Eurodollar Rate Loans until such time as Administrative Agent
notifies Borrowers and Lenders that the circumstances giving rise to such notice
no longer exist and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation given by Borrowers with respect to the Loans in respect
of which such determination was made shall be deemed to be for a Base Rate Loan.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In
the event that on any date any Lender shall have determined (which determination
shall be conclusive and binding upon all parties hereto but shall be made only
after consultation with Borrowers and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful
as a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the interbank Eurodollar market or the position
of such Lender in that market, then, and in any such event, such Lender shall be
an "AFFECTED
42
LENDER" and it shall on that day give notice (by telefacsimile or by telephone
confirmed in writing) to Borrowers and Administrative Agent of such
determination. Administrative Agent shall promptly notify each other Lender of
the receipt of such notice. Thereafter (a) the obligation of the Affected Lender
to make Loans as, or to convert Loans to, Eurodollar Rate Loans shall be
suspended until such notice shall be withdrawn by the Affected Lender, (b) to
the extent such determination by the Affected Lender relates to a Eurodollar
Rate Loan then being requested by Borrowers pursuant to a Notice of Borrowing or
a Notice of Conversion/Continuation, the Affected Lender shall make such Loan as
(or convert such Loan to, as the case may be) a Base Rate Loan, (c) the Affected
Lender's obligation to maintain its outstanding Eurodollar Rate Loans (the
"AFFECTED LOANS") shall be terminated at the earlier to occur of the expiration
of the Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being requested by Borrowers pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, Borrowers shall have the
option, subject to the provisions of subsection 2.6D, to rescind such Notice of
Borrowing or Notice of Conversion/Continuation as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above. Administrative Agent shall promptly
notify each other Lender of the receipt of such notice. Except as provided in
the immediately preceding sentence, nothing in this subsection 2.6C shall affect
the obligation of any Lender other than an Affected Lender to make or maintain
Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance with the
terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Borrowers shall, jointly and severally, compensate each Lender, upon
written request by that Lender pursuant to subsection 2.6, for all reasonable
losses, expenses and liabilities (including any interest paid by that Lender to
lenders of funds borrowed by it to make or carry its Eurodollar Rate Loans and
any loss, expense or liability sustained by that Lender in connection with the
liquidation or re-employment of such funds) which that Lender may sustain: (i)
if for any reason (other than a default by that Lender) a borrowing of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Borrowing or a telephonic request therefor, or a conversion to or continuation
of any Eurodollar Rate Loan does not occur on a date specified therefor in a
Notice of Conversion/Continuation or a telephonic request therefor, (ii) if any
prepayment (including any prepayment or conversion occasioned by the
circumstances described in subsection 2.6C) or other principal payment or any
conversion of any of its Eurodollar Rate Loans occurs on a date prior to the
last day of an Interest Period applicable to that Loan, (iii) if any prepayment
of any of its Eurodollar Rate Loans is not made on any date specified in a
notice of prepayment given by Borrowers, or (iv) as a consequence of any other
default by Borrowers in the repayment of Eurodollar Rate Loans when required by
the terms of this Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.
43
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had funded each of its
Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing
interest at the rate obtained pursuant to clause (i) of the definition of
Eurodollar Rate in an amount equal to the amount of such Eurodollar Rate Loan
and having a maturity comparable to the relevant Interest Period, whether or not
its Eurodollar Rate Loans had been funded in such manner.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence
of and during the continuation of a Potential Event of Default or an Event of
Default, (i) Borrowers may not elect to have a Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest Period
then in effect for that Loan and (ii) subject to the provisions of subsection
2.6D, any Notice of Borrowing or Notice of Conversion/Continuation given by
Borrowers with respect to a requested borrowing or conversion/continuation that
has not yet occurred shall be deemed to be for a Base Rate Loan or, if the
conditions to making a Loan set forth in subsection 3.2 cannot then be
satisfied, to be rescinded by Borrowers.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS. Subject to the provisions
of subsection 2.7B (which shall be controlling with respect to the matters
covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
other Government Authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other Government
Authority (whether or not having the force of law):
(i) subjects such Lender to any additional Tax (other
than any withholding tax with respect to which subsection 2.7B applies)
with respect to this Agreement or any of its obligations hereunder
(including with respect to maintaining any Commitment hereunder) or any
payments to such Lender of principal, interest, fees or any other
amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve,
special deposit, compulsory loan, insurance charge or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect
to Eurodollar Rate Loans that are reflected in the definition of
Eurodollar Rate); or
(iii) imposes any other condition (other than with respect
to Taxes) on or affecting such Lender or its obligations hereunder or
the interbank Eurodollar market;
44
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining its Loans or Commitments or to reduce
any amount received or receivable by such Lender with respect thereto; then, in
any such case, Borrowers shall promptly pay, on a joint and several basis, to
such Lender, upon receipt of the statement referred to in subsection 2.8A, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
on an after-tax basis for any such increased cost or reduction in amounts
received or receivable hereunder.
B. TAXES.
(i) Payments to Be Free and Clear. All sums payable by
Borrowers under this Agreement and the other Loan 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 Loan Documents:
(a) Borrowers shall notify Administrative Agent
of any such requirement or any change in any such requirement
as soon as Borrowers become aware of it;
(b) Borrowers shall pay any such Tax when such
Tax is due, such payment to be made (if the liability to pay
is imposed on any Borrower) for their own account or (if that
liability is imposed on Administrative Agent or such Lender,
as the case may be) on behalf of and in the name of
Administrative Agent or such Lender;
(c) the sum payable by Borrowers in respect of
which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to ensure
that, after the making of that deduction, withholding or
payment, Administrative Agent or such Lender, as the case may
be, receives on the due date a net sum equal to what it would
have received had no such deduction, withholding or payment
been required or made; and
(d) within 30 days after paying any sum from
which any or all of them are required by law to make any
deduction or withholding, and within 30 days after the due
date of payment of any Tax which any or all of them are
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.
45
(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 2.7B(iii), a "NON-US LENDER") shall 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 Loan Documents.
(b) Each Non-US Lender hereby agrees, from time
to time after the initial delivery by such Lender of such
forms, whenever a lapse in time or change in circumstances
renders such forms, certificates or other evidence so
delivered obsolete or inaccurate in any material respect, that
such Lender shall promptly (1) deliver to Administrative Agent
and to Company two original copies of renewals, amendments or
additional or successor forms, properly completed and duly
executed by such Lender, together with any other certificate
or statement of exemption required in order to confirm or
establish that such Lender is not subject to United States
withholding tax with respect to payments to such Lender under
the Loan Documents or (2) notify Administrative Agent and
Company of its inability to deliver any such forms,
certificates or other evidence.
(c) Borrowers shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii) if such Lender shall have failed to
satisfy the requirements of clause (a) or (b)(1) of this
subsection 2.7B(iii); provided that if such Lender shall have
satisfied the requirements of subsection 2.7B(iii)(a) on the
date such Lender became a Lender, nothing in this subsection
2.7B(iii)(c) shall relieve Borrowers of their obligation to
pay any amounts pursuant to subsection 2.7B(ii)(c) in the
event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any
change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to
withholding as described in subsection 2.7B(iii)(a).
(iv) Indemnity for Withheld Amounts. Borrowers hereby
agree to indemnify Lenders and Administrative Agent for the full amount
of any deduction or withholding on account of any Taxes imposed,
levied, collected, withheld or assessed by or within the United States
or any political subdivision in or of the United States or any other
46
jurisdiction from or to which a payment is made by or on behalf of
Borrowers or by any federation or organization of which the United
States or any such jurisdiction is a member at the time of payment
(including any such Taxes imposed by any jurisdiction on amounts
payable under this subsection 2.7B) that Borrowers are required to pay
pursuant to subsection 2.7B(ii) but were paid by Administrative Agent
or Lenders with respect to sums payable by Borrowers under this
Agreement and the other Loan Documents and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made promptly, and in any event
within 10 days after, the relevant Lender or 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 Loans, Commitments, 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 2.8A, Borrowers shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction.
2.8 STATEMENT OF LENDERS; OBLIGATION OF LENDERS TO MITIGATE.
A. STATEMENTS. Each Lender claiming compensation or
reimbursement pursuant to subsection 2.6D, 2.7 or 2.8B shall deliver to Company
(with a copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis of the calculation of such compensation or
reimbursement, which statement shall be conclusive and binding upon all parties
hereto absent manifest error; provided that a Lender claiming compensation or
reimbursement pursuant to subsection 2.7B(ii) due to circumstances in effect as
of the Closing Date shall not be required to deliver more than one such
statement to Borrowers or Administrative Agent, and such statement shall remain
effective with respect to this Agreement until all Obligations have been paid in
full.
B. MITIGATION. Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering the
Loans of such Lender becomes aware of the occurrence of an event or the
existence of a condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender to receive payments under subsection
2.7 (other than subsection 2.7B(ii)), it will use reasonable efforts to make,
fund or maintain the Commitments of such Lender or the Loans of such Lender
through another lending office of such Lender, if (i) as a result thereof the
circumstances which would cause such Lender to be an Affected Lender would cease
to exist or the additional amounts which would otherwise
47
be required to be paid to such Lender pursuant to subsection 2.7 would be
materially reduced and (ii) as determined by such Lender in its sole discretion,
such action would not otherwise be disadvantageous to such Lender; provided that
such Lender will not be obligated to utilize such other lending office pursuant
to this subsection 2.8B unless Borrowers agree to pay, on a joint and several
basis, all incremental expenses incurred by such Lender as a result of utilizing
such other lending office as described above.
2.9 DEFAULTING LENDER.
Anything contained herein to the contrary notwithstanding, in
the event that any Lender (any such Lender being a "DEFAULTING LENDER") defaults
(a "FUNDING DEFAULT") in its obligation to fund any Loan (a "DEFAULTED LOAN") in
accordance with the terms of this Agreement, then (i) during any Default Period
(as defined below) with respect to such Defaulting Lender, such Defaulting
Lender shall not be deemed a "Lender" for purposes of voting on any matters
(including the granting of any consents or waivers) with respect to any of the
Loan Documents (provided, however, that nothing in this clause (i) shall be
construed as permitting, without the consent of the relevant Defaulting Lender,
a reduction in the principal amount of such Defaulting Lender's funded Loans or
other outstanding funded Obligations, an increase in the amount of such Lender's
Commitment, or an extension of the Maturity Date), (ii) to the extent permitted
by applicable law, until such time as the Default Excess (as defined below) with
respect to such Defaulting Lender shall have been reduced to zero, any payment
of amounts with respect to the Loans shall be applied first, to amounts funded
by Administrative Agent 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 Loans of other Lenders (other than any other Defaulting Lenders)
as if such Defaulting Lender (and any other Defaulting Lenders) had no Loans
outstanding and the Loan Exposure of such Defaulting Lender were zero, (iii)
such Defaulting Lender's Commitment, Loans and Pro Rata Share with respect
thereto shall be excluded for purposes of calculating the commitment fee in
respect of any day during any Default Period with respect to such Defaulting
Lender, and such Defaulting Lender shall not be entitled to receive any such
commitment fee with respect to such Defaulting Lender's Commitments in respect
of any Default Period with respect to such Defaulting Lender, and (iv) the Total
Utilization of Commitments as at any date of determination shall be calculated
as if such Defaulting Lender had funded all Defaulted Loans of such Defaulting
Lender.
For purposes of this Agreement, (I) "DEFAULT PERIOD" means,
with respect to any Defaulting Lender, the period commencing on the date of the
applicable Funding Default and ending on the earliest of the following dates:
(A) the date on which all Commitments are cancelled or terminated and/or the
Obligations are declared or become immediately due and payable, (B) the date on
which (1) the Default Excess with respect to such Defaulting Lender shall have
been reduced to zero (whether by the funding by such Defaulting Lender of any
Defaulted Loans of such Defaulting Lender or by the non-pro rata application of
any payments of amounts with respect to the Loans in accordance with the terms
hereof or any combination thereof), and (2) such Defaulting Lender shall have
delivered to Company and Administrative Agent a written reaffirmation of its
intention to honor its obligations under this Agreement with respect to its
Commitments, and (C) the date on which Company and Administrative Agent 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
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applicable Pro Rata Share of the aggregate outstanding principal amount of Loans
of all Lenders (calculated as if all Defaulting Lenders (other than such
Defaulting Lender) had funded all of their respective Defaulted Loans) over (y)
the aggregate outstanding principal amount of Loans of such Defaulting Lender.
No Commitment of any Lender shall be increased or otherwise
affected, and, except as otherwise expressly provided in this subsection 2.9,
performance by any Borrower of its obligations under this Agreement and the
other Loan Documents shall not be excused or otherwise modified, as a result of
any Funding Default or the operation of this subsection 2.9. The rights and
remedies against a Defaulting Lender under this subsection 2.9 are in addition
to other rights and remedies that Borrowers may have against such Defaulting
Lender with respect to any Funding Default and that Administrative Agent or any
Lender may have against such Defaulting Lender with respect to any Funding
Default.
2.10 JOINT AND SEVERAL LIABILITY; PAYMENT INDEMNIFICATIONS.
A. JOINT AND SEVERAL OBLIGATIONS. All Obligations of Borrowers
under the Loan 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 Loan 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 Loan Party, including any action or inaction
which would otherwise release a surety.
C. CONTRIBUTION RIGHTS. In order to provide for just and
equitable contribution among Borrowers if any payment is made by a Borrower (a
"FUNDING BORROWER") in discharging any of the Obligations, that Funding Borrower
shall be entitled to a contribution from the other Borrowers for all payments,
damages and expenses incurred by that Funding Borrower in discharging the
Obligations, in the manner and to the extent required to allocate liabilities in
an equitable manner among Borrowers on the basis of the relative benefits
received by Borrowers. If and to the extent that a Funding Borrower makes any
payment to any Lender or any other Person in respect of the Obligations, any
claim which said Funding Borrower may have against the other Borrowers by reason
thereof shall be subject and subordinate to the prior cash payment in full of
the Obligations. The parties hereto acknowledge that the right to contribution
hereunder shall constitute an asset of the party to which such contribution is
owing and shall be subject to the Liens and security interests of 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 Loan Documents, or alter, limit or impair the
obligation of each Borrower, which is absolute and unconditional, to repay the
Obligations.
2.11 RIGHTS OF SUBROGATION, CONTRIBUTION, ETC.
Except as prohibited under applicable law, Company hereby
waives any claim, right or remedy, direct or indirect, that Company now has or
may hereafter have against any other Borrower or any guarantor of the
Obligations in connection with this Agreement or the performance by Company of
its obligations hereunder, in each case whether such claim, right or
49
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 any guarantor of the Obligations, (b) any right to enforce, or to
participate in, any claim, right or remedy that Agent or Lender now has or may
hereafter have against any other Borrower or any guarantor of the Obligations,
and (c) any benefit of, and any right to participate in, any collateral or
security now or hereafter held by Agent or Lender. In addition, until the
Obligations shall have been indefeasibly paid in full and the Commitments shall
have terminated, Company shall withhold exercise of any right of contribution
Company may have against any other Borrower or Loan 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 Loan Party or
against any collateral or security shall be junior and subordinate to any rights
Agent or Lender may have against any other Borrower, to all right, title and
interest Agent or Lender may have in any such collateral or security, and to any
right Agent or Lender may have against such Loan Party. If any amount shall be
paid to Company on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Obligations shall
not have been paid in full, such amount shall be held in trust for
Administrative Agent on behalf of Administrative Agent and Lenders and shall
forthwith be paid over to Administrative Agent for the benefit of Administrative
Agent and Lenders to be credited and applied against the Obligations, whether
matured or unmatured, in accordance with the terms hereof.
SECTION 3. CONDITIONS TO LOANS
The obligations of Lenders to make Loans hereunder are subject
to the satisfaction of the following conditions.
3.1 CONDITIONS TO CLOSING DATE.
The obligations of Lenders with respect to their respective
Commitments and to make any Loans to be made on the Closing Date, are subject to
prior or concurrent satisfaction of the following conditions:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date,
Borrowers shall, and shall cause each other Loan 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
Loan 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 Loan 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
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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 Loan 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 Loan Documents to which it is a party;
(iv) Executed originals of the Loan Documents to which
such Person is a party; and
(v) Such other documents as Administrative Agent may
reasonably request.
B. FEES. Borrowers shall have paid out of Debtors' estates to
Administrative Agent, (i) for distribution (as appropriate) to Administrative
Agent, the fees payable on the Closing Date referred to in subsection 2.3 and
all reasonable and documented costs and expenses (including legal fees, due
diligence fees, recordation expenses, other out-of-pocket expenses and taxes) of
Administrative Agent incurred in connection with the negotiation, preparation,
recordation, execution and completion of the Loan Documents and the transactions
contemplated thereby, including such fees and expenses of O'Melveny & Xxxxx LLP,
counsel to Administrative Agent, 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 DIP Agents
and DIP Lenders owed pursuant to subsection 10.2 of the DIP Credit Agreement.
Borrowers shall have paid out of Debtors' estates to D.E. Shaw an arrangement
fee of $450,000, unless Borrowers have previously paid out of Debtors' estates
to D.E. Shaw the commitment fee 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 D.E. Shaw Laminar Portfolios, L.L.C.
as Additional New Lender and Make Certain Payments in Connection Therewith
entered by the Bankruptcy Court on November 21, 2003).
C. CORPORATE AND CAPITAL STRUCTURE; MANAGEMENT; OWNERSHIP.
(i) Corporate Structure. DHC shall own all of the issued
and outstanding Capital Stock of Covanta. CEA shall own all of the
issued and outstanding common stock of Company. The corporate
organizational structure of Company and its Subsidiaries on the Closing
Date, after giving effect to the Approved Plan of Reorganization, shall
be satisfactory to Requisite Lenders, shall be consistent in all
material respects with the Approved Plan of Reorganization and the
Disclosure Statement related thereto.
(ii) Capital Structure and Ownership. DHC shall have made
a cash equity contribution to Covanta of not less than $30,000,000. The
capital structure and ownership of Company and its Subsidiaries on the
Closing Date, after giving effect to the
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Approved Plan of Reorganization, shall be satisfactory to Requisite
Lenders, shall be consistent in all material respects with the Approved
Plan of Reorganization and the Disclosure Statement related thereto.
(iii) Management. The Governing Bodies, officers and
management structure of Covanta, Company and its Subsidiaries on the
Closing Date, after giving effect to the Approved Plan of
Reorganization, shall be satisfactory to Requisite Lenders, shall be
consistent in all material respects with the Approved Plan of
Reorganization and the Disclosure Statement related thereto and shall
be as set forth on Schedule 3.1C annexed hereto. Lenders shall have
received copies of, and Requisite Lenders shall be satisfied with the
form and substance of, the Employment Agreements and any other
employment agreements with and any incentive arrangements for senior
management of Company and its Subsidiaries.
D. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Company shall have delivered to Administrative Agent an Officer's Certificate,
in form and substance satisfactory to Administrative Agent, to the effect that
the representations and warranties in Section 4 are true, correct and complete
in all material respects on and as of the Closing Date to the same extent as
though made on and as of that date (or, to the extent such representations and
warranties specifically relate to an earlier date, that such representations and
warranties were true, correct and complete in all material respects on and as of
such earlier date) and that Borrowers shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before the Closing Date.
E. PLAN OF REORGANIZATION; CONFIRMATION ORDER; DISCHARGE OF
EXISTING CREDIT FACILITIES.
(i) Plan of Reorganization. The Plan of Reorganization
and all amendments, modifications, revisions and restatements thereof,
if any, shall have been approved by the creditors of Borrowers
(including the DIP Lenders and the Prepetition Lenders) in requisite
number and percentage, and confirmed by the Bankruptcy Court pursuant
to the Confirmation Order and delivered to Administrative Agent (the
"APPROVED PLAN OF REORGANIZATION"). Except as set forth in
modifications filed with the Bankruptcy Court and approved by
Administrative Agent, there shall have been no modifications,
amendments, revisions or restatements of the Approved Plan of
Reorganization. Any representation and warranty made by Covanta 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 3.1T, the
corporate reorganization described in subsection 3.1S, the making of
the Loans under this Agreement and the Indebtedness described in
subsection 3.1F; and (b) upon satisfaction of all conditions to the
effectiveness of this Agreement, shall become effective in accordance
with its terms without waiver of any condition to such effectiveness
that, in Administrative Agent's reasonable judgment, is material.
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(ii) Confirmation Order. The Confirmation Order shall have
been delivered to Lenders, shall address the matters set forth in
subsections 3.1F, 3.1S and 3.1T, the making of the Loans and
Commitments under this Agreement and the terms hereof and the granting
of all Liens and consents required under this Agreement and the other
Loan 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, not less than 11 days shall
have elapsed since entry of the Confirmation Order and Administrative
Agent 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 Administrative
Agent and the Lenders described in subsection 3.1B shall be in full
force and effect, without modification or amendment except to the
extent approved by Administrative Agent.
(iv) Material Contracts. 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
Administrative Agent.
F. MATTERS RELATING TO EXISTING INDEBTEDNESS.
(i) Termination of DIP Credit Agreement and Related
Liens. (a) Indebtedness consisting of funded amounts outstanding under
the DIP Credit Agreement on the Closing Date shall have been repaid in
full in cash, (b) all undrawn "Tranche A L/Cs" and "Tranche X X/Cs"
under the DIP Credit Agreement (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 issued under the Detroit L/C Credit Agreement as
the Detroit L/Cs, (d) each letter of credit (if any) issued or deemed
issued under the DIP Credit Agreement other than the "Tranche A L/Cs"
and "Tranche X X/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 under the DIP
Credit Agreement shall have been delivered to Administrative Agent to
the extent required by Administrative Agent.
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(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 Loans and by
application of Cash On Hand of Borrowers (as described in subsection
3.1T), and (b) all documents or instruments necessary to release all
Liens securing Indebtedness or other obligations of Borrowers and their
Subsidiaries under the Prepetition Credit Agreement and the 9.25%
Debentures shall have been delivered to Administrative Agent to the
extent required by Administrative Agent.
(iii) Domestic Facilities. Indebtedness under the Detroit
L/C Credit Agreement, the New L/C Facility Agreement and the High Yield
Notes shall be secured as set forth in the Domestic Loan Documents and
High Yield Indenture and shall be non-recourse to the Borrowers or
their assets. The Domestic Loan Documents, High Yield Notes and High
Yield Indenture shall be in full force and effect, the "Closing Date"
as defined in each of the Domestic Loan Documents, High Yield Notes,
and High Yield Indenture shall have occurred, and the Domestic Loan
Documents, High Yield Notes and High Yield Indenture and shall 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
of Domestic Borrowers and Borrowers (other than Indebtedness under the
Loan Documents, the Domestic Loan Documents, and the CPIH Term Loan
Documents) shall consist of (a) $205,000,000 in aggregate initial
principal amount of High Yield Notes, (b) a note issued by Covanta in a
principal amount not to exceed $35,000,000 (the "TAX NOTE"),
representing the back tax liability of Covanta 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, (c) "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 Covanta (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, (d) outstanding Indebtedness described in Schedule
6.1(v) annexed hereto, and (e) Indebtedness under the CEA Stock Pledge
Agreement. The terms and conditions of all such Indebtedness (including
payment terms, covenants, representations and warranties, defaults and,
in the case of the Unsecured Creditor Notes, payment subordination
provisions), and the definitive documentation therefor, shall be in
form and in substance satisfactory to Requisite Lenders.
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(v) Related Agreements in Full Force and Effect. Lenders
shall have received a fully executed or conformed copy of the Domestic
Loan Documents, CPIH Term Loan Documents, the High Yield Indenture and
the High Yield Notes, the Management Services and Reimbursement
Agreement, the Corporate Services Reimbursement Agreement, the Tax
Note, the Unsecured Creditor Notes, the Unsecured Creditor Notes
Indenture, the Employment Agreement, the Intercreditor Agreement and
any documents executed in connection therewith, each such Related
Agreement, the Domestic Loan Documents, the High Yield Notes, the
Unsecured Creditor Notes, the Employment Agreements, the Intercreditor
Agreement, the High Yield Indenture, the Management Services and
Reimbursement Agreement, the Corporate Services Reimbursement Agreement
and the Unsecured Creditor Notes 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 (i) the audited consolidated financial
statements of Covanta and its Subsidiaries for the Fiscal Year ended December
31, 2002 delivered pursuant to clause (i) of subsection 4.1G of the Domestic
Credit Agreement, (ii) the unaudited consolidated financial statements of
Covanta and its Subsidiaries for the Fiscal Quarters ended March 31, 2003, June
30, 2003 and September 30, 2003 delivered pursuant to clause (ii) of subsection
4.1G of the Domestic Credit Agreement, and (iii) financial statements with
respect to Company and its Subsidiaries derived from the financial statements
described in clauses (i) and (ii) above in form satisfactory to Administrative
Agent, all in reasonable detail and (in the case of the financial statements
described in clause (iii)) certified by the chief executive officer or chief
financial officer of Company that they fairly present, in all material respects,
the financial condition of Company and its Subsidiaries as of the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments. Company shall have delivered to Administrative Agent and Lenders
such projected financial statements as Administrative Agent may reasonably
request for the period from the Closing Date through December 31, 2007,
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 and 2007
attached hereto as Schedule 1.1B, which budget and other projections shall be
satisfactory to Administrative Agent and Requisite Lenders and shall be
accompanied by a certificate from the chief executive officer or chief financial
officer of Company certifying that they are based upon good faith estimates and
assumptions believed by Company to be reasonable at the time made.
H. SOLVENCY ASSURANCES. On the Closing Date, Administrative
Agent and Lenders shall have received an Officer's Certificate from Covanta
dated the Closing Date, substantially in the form delivered under subsection
4.1H of the Domestic Credit Agreement and with appropriate attachments,
demonstrating that, after giving effect to the consummation of the transactions
contemplated by the Domestic Loan Documents, Domestic Borrowers, taken as a
whole, and Covanta will be Solvent.
I. OPINIONS OF COUNSEL TO LOAN 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
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and (d) Xxxxx Peabody, LLP, counsel for Borrowers, in form and substance
reasonably satisfactory to Administrative Agent and their counsel, dated as of
the Closing Date and setting forth substantially the matters in the opinions
designated in Exhibit VI annexed hereto and as to such other matters as
Administrative Agent acting on behalf of Lenders may reasonably request (this
Agreement constituting a written request by Borrowers to such counsel to deliver
such opinions to Administrative Agent and Lenders).
J. OPINIONS OF COUNSEL DELIVERED UNDER RELATED AGREEMENTS AND
OTHER DOCUMENTS. Administrative Agent and its counsel shall have received copies
of the opinions of counsel delivered to the parties under the Related
Agreements, the Domestic Loan Documents, the High Yield Note, the High Yield
Indenture, 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 Covanta's insurance broker or other evidence
satisfactory to it that all insurance required to be maintained pursuant to
subsection 5.4 is in full force and effect and that Collateral Agent and/or
Administrative Agent on behalf of Lenders has been named as additional insured
and/or loss payee thereunder to the extent required under subsection 5.4.
L. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS. Covanta
and its Subsidiaries 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 Loan Documents and the
continued operation of the business conducted by Covanta, Company and its
Subsidiaries in substantially the same manner as conducted prior to the Closing
Date. Each such Governmental Authorization or consent shall be in full force and
effect, except in a case where the failure to obtain or maintain a Governmental
Authorization or consent, either individually or in the aggregate, should not
reasonably be expected to have a Material Adverse Effect. Administrative Agent
shall have received an Officer's Certificate of Company in form and substance
reasonably satisfactory to Administrative Agent certifying as to the foregoing
matters and any other evidence reasonably requested by Administrative Agent in
support thereof. All applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority that would restrain,
prevent or otherwise impose adverse conditions on the transactions contemplated
by the Loan 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.
Administrative Agent shall have received evidence satisfactory to it that Loan
Parties 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
56
personal and mixed property Collateral, with the priority set forth in the
Collateral Documents (it being understood that such actions by CEA shall relate
solely to its pledge of the common 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 Company, in
each case, together with copies of all such filings disclosed by such
search, and (b) UCC termination statements duly executed by all
applicable Persons for filing in all applicable jurisdictions as may be
necessary to terminate any effective UCC financing statements or
fixture filings disclosed in such search (other than any such financing
statements or fixture filings in respect of Liens permitted to remain
outstanding pursuant to the terms of this Agreement);
(iii) UCC Financing Statements and Fixture Filings.
Delivery to Collateral Agent of UCC financing statements and, where
appropriate, fixture filings, duly executed by each applicable Borrower
with respect to all personal and mixed property Collateral of such
Borrower and by CEA with respect to the common stock of Company, in
each case, for filing in all jurisdictions as may be necessary or in
the opinion of Collateral Agent desirable to perfect the security
interests in favor of Collateral Agent created in such Collateral
pursuant to the Collateral Documents;
(iv) PTO Cover Sheets, Etc. Delivery to Collateral Agent
of all cover sheets or other documents or instruments Collateral Agent
may reasonably request to be filed with the PTO in order to evidence
Liens in favor of Collateral Agent in respect of any IP Collateral; and
(v) Control Agreements. Delivery to Collateral Agent of
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;
N. [INTENTIONALLY OMITTED].
O. NO MATERIAL ADVERSE CHANGE. Administrative Agent (in its
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
57
and its Subsidiaries taken as a whole, and Company shall have delivered to
Administrative Agent 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 3.1P annexed
hereto.
Q. [INTENTIONALLY OMITTED].
R. GEOTHERMAL SALE. Covanta 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. COMPANY REORGANIZATION. On the Closing Date, (i) Covanta
shall own, directly or indirectly, 100% of the outstanding Capital Stock of CEA,
(ii) CEA shall own 100% of the outstanding common stock of Company, 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, (ii) all relevant
operating and administrative expenses associated with the IPP International
Business shall be transferred into Company in accordance with the Management
Services and Reimbursement Agreement, and (iii) not less than $5,000,000 of cash
for working capital shall have been transferred from Covanta and its
Subsidiaries (other than Borrowers) to the Borrowers as an equity contribution.
T. DISTRIBUTION. All unrestricted Cash On Hand (including,
without limitation, net sale proceeds from the Geothermal Sale) of Covanta and
its Subsidiaries remaining prior to the equity contribution referred to in
subsection 3.1C(ii) but after (i) the transfer of working capital amounts to
Company as described in subsection 3.1S, (ii) the payment of the fees referred
to in subsection 3.1B, (iii) the disposition of those letters of credit referred
to in subsection 3.1F(i)(c), (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) payment
of funded outstanding obligations under the DIP Credit Agreement (if any) and
(without duplication of clauses (i) through (vi)) the payment of other "Exit
Costs" (as defined in the Approved Reorganization Plan), subject to an amount of
cash (which amount shall be determined in accordance with 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
Covanta) (plus reserves required to address timing issues associated with the
Geothermal Sale and emergence from the Chapter 11 Cases (in an aggregate amount
satisfactory to the DIP Lenders)) to be retained in the Cash Management System
in the United States by Covanta 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 Detroit L/C 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 the holders of Prepetition Secured
Claims, on account of any remaining allowed pre-Petition Date exposure, in
accordance with the
58
Approved Plan of Reorganization, and third, to the extent of 25% of any
remaining Distributable Cash, to Covanta, 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. Covanta, its independent advisers,
Administrative Agent and Administrative Agent's counsel shall have determined to
their respective sole satisfaction that the net operating losses disclosed to
Administrative Agent and Lenders prior to the Closing Date as being held by DHC
are available and accessible to Covanta 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 Loan Documents, any of the
Domestic Loan Documents, the High Yield Notes or the High Yield Indenture that
could reasonably be expected to have a Material Adverse Effect or a material
adverse effect on the Approved Plan of Reorganization, or any of the Loan
Documents, or any of the Domestic Loan Documents.
W. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, and their
counsel shall be satisfactory in form and substance to Administrative Agent and
such counsel, and Administrative Agent and such counsel shall have received all
such counterpart originals or certified copies of such documents as
Administrative Agent may reasonably request.
Each Lender, by delivering to Administrative Agent a signed
counterpart to this Agreement, shall be deemed (unless such Lender indicates
otherwise in writing to Administrative Agent and Company) to have acknowledged
receipt of, and to have consented to, approved and be satisfied with, the
documents, agreements, instruments or information which require approval,
consent or satisfaction of the Lenders or Requisite Lenders, as applicable, in
order for the conditions precedent contained in this subsection 3.1 to be
satisfied.
Notwithstanding anything in this Section 3 to the contrary, it
is understood and agreed that the conditions of subsection 3.1A(i) shall be
deemed satisfied notwithstanding failure to deliver all of the certificates or
other evidence of good standing described in subsection 3.1A(i), so long as (i)
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, (ii) failure to deliver all of the certificates or other
evidence of good standing described in subsection 3.1A(i) on or prior to the
date which is 60 days after the Closing Date shall constitute an immediate Event
of Default on such date.
3.2 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date
are subject to the following further conditions precedent:
59
A. Administrative Agent shall have received before that
Funding Date, in accordance with the provisions of subsection 2.1B, an
originally executed Notice of Borrowing, in each case signed by a duly
authorized Officer of Borrowers.
B. As of that Funding Date:
(i) The representations and warranties contained herein
and in the other Loan Documents shall be true, correct and complete in
all material respects on and as of that Funding Date to the same extent
as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall have been true,
correct and complete in all material respects on and as of such earlier
date;
(ii) No event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
such Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iii) Each Loan Party 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
that Funding Date;
(iv) No order, judgment or decree of any arbitrator or
Government Authority (including the Bankruptcy Court) shall purport to
enjoin or restrain any Lender from making the Loans to be made by it on
that Funding Date;
(v) After giving effect to the proposed borrowing, the
aggregate principal amount of all outstanding Loans shall not exceed
the Commitments then in effect;
(vi) Company shall have delivered to Administrative Agent
an Officer's Certificate (together with such supporting calculations as
Administrative Agent may reasonably request) certifying that, before
and after giving effect to the contemplated application of amounts
proposed to be borrowed, Company and its Subsidiaries shall be in pro
forma compliance with subsection 6.6; and
(vii) The aggregate amount of Cash On Hand shall not exceed
$2,000,000.
SECTION 4. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make the Loans, Borrowers represent and warrant to each Lender, on the date of
this Agreement, on the Closing Date and on each Funding Date, that the following
statements are true, correct and complete:
4.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS
AND SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan 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 4.1 annexed hereto. Each Loan
60
Party has all requisite power and authority to own and operate its properties,
to carry on its business as now conducted and as proposed to be conducted, to
enter into the Loan Documents to which it is a party and to carry out the
transactions contemplated thereby. Each Loan Party is in compliance with all
material terms of its Organizational Documents.
B. QUALIFICATION AND GOOD STANDING. Each Loan 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
6.11.
D. SUBSIDIARIES. All of the Subsidiaries of Company as of the
Closing Date and their jurisdictions of organization are identified in Schedule
4.1 annexed hereto. The Capital Stock of Company and each of its Subsidiaries
identified in Schedule 4.1 annexed hereto is duly authorized, validly issued,
fully paid and nonassessable and none of such Capital Stock constitutes Margin
Stock. CEA, Company and each of its Subsidiaries identified in Schedule 4.1
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
4.1 annexed hereto correctly sets forth, as of the Closing Date, the ownership
interest of CEA, Company and each of its Subsidiaries in Company and each of its
Subsidiaries identified therein.
4.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents have been duly authorized by all necessary
action on the part of each Loan Party that is a party thereto.
B. NO CONFLICT. The execution, delivery and performance by
Loan Parties of the Loan Documents to which they are parties and the
consummation of the transactions contemplated by the Loan Documents do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to CEA, Company or any of its Subsidiaries, the
Organizational Documents of CEA, Company or any of its Subsidiaries or any
order, judgment or decree of any court or other Government Authority binding on
CEA, 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 CEA, 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 Covanta or any of its Subsidiaries (other than any Liens created
under any of the Loan 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
61
Obligation of Covanta 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 Loan Parties of the Loan Documents to which they are parties and
the consummation of the transactions contemplated by the Loan 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 Loan
Documents and those Governmental Authorizations which have been obtained.
D. BINDING OBLIGATION. Each of the Loan Documents has been
duly executed and delivered by each Loan Party that is a party thereto and is
the legally valid and binding obligation of such Loan Party, enforceable against
such 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.
E. RESTRICTIONS ON TRANSFER. There are no restrictions on
Company or any of its Subsidiaries which prohibit or otherwise restrict the
transfer of cash or other assets from one Borrower to another, other than (i)
prohibitions or restrictions existing under or by reason of (a) this Agreement
and the other Loan 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 6.2A,
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 6.2D.
4.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, pursuant to
subsection 3.1G, (i) statements of income, balance sheets and statements of cash
flows with respect to Company and its Subsidiaries for the Fiscal Year ended
December 31, 2002 and (ii) statements of income, balance sheets and statements
of cash flows with respect to 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 date subsequent to the Closing Date, is not reflected in the most
recent financial statements delivered to Lenders pursuant to subsection 5.1 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 6.4)
62
and that, in any such case, is material in relation to the business, operations,
properties, assets or financial condition of Company or any of its Subsidiaries
taken as a whole.
4.4 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 6.5, and (ii)
as was permitted by subsection 7.5 of the DIP Credit Agreement.
4.5 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 4.3 or in
the most recent financial statements delivered pursuant to subsection 5.1, 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 6.7. 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 4.5B
annexed hereto contains a true, accurate and complete list of (i) all fee
interests in any Real Property Assets and (ii) all leases, subleases or
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting each Real Property Asset,
regardless of whether a Borrower is the landlord or tenant (whether directly or
as an assignee or successor in interest) under such lease, sublease or
assignment. As of the Closing Date, except as specified in Schedule 4.5B 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
4.5C 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.
63
4.6 LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 4.6 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.
4.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 5.3, 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.
4.8 PERFORMANCE OF AGREEMENTS; MATERIAL CONTRACTS.
A. Except as set forth on Schedule 4.8A 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.
64
C. Schedule 4.8C 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.
4.9 GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to
regulation under (i) the Public Utility Holding Company Act of 1935 ("PUHCA")
(other than as an "exempt wholesale generator" or as a "foreign utility
company", as such terms are defined in PUHCA), (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.
4.10 SECURITIES ACTIVITIES.
A. Neither CEA nor Company nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
B. Following the application of the proceeds of each Loan, not
more than 25% of the value of the assets (either of Company only or of Company
and its Subsidiaries on a consolidated basis) subject to the provisions of
subsection 6.2 or 6.7 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 7.2, will be Margin
Stock.
4.11 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 4.11 annexed hereto or
in the financial statements
65
delivered to Lenders pursuant to subsection 3.1 or 5.1 hereof, as applicable, no
Employee Benefit Plan provides health or welfare benefits (through the purchase
of insurance or otherwise) for any retired or former employee of Company or any
of its Subsidiaries.
D. As of January 1 of each year (based on, with respect to
each Pension Plan, the actuarial valuation as of such January 1, or if no such
valuation was performed as of such January 1 but was performed within the
preceding 12 months, the date as of which the valuation was so performed), 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.
4.12 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.
66
4.13 ENVIRONMENTAL PROTECTION.
A. Except as set forth in Schedule 4.13 annexed hereto,
neither Company nor any of its 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 4.13 annexed hereto,
neither Covanta nor any of its 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 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 4.13 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 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 4.13 annexed hereto, (i)
neither Covanta nor any of its Subsidiaries nor, to Company's knowledge, any
predecessor of Covanta or any of its 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.
4.14 EMPLOYEE MATTERS.
Except as described in Schedule 4.14 annexed hereto with
respect to the Bataan Project, there is no strike or work stoppage in existence
or threatened involving Company or any of its Subsidiaries that would reasonably
be expected to have a Material Adverse Effect.
4.15 MATTERS RELATING TO COLLATERAL.
A. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution
and delivery of the Collateral Documents by Loan Parties, together with (x) the
actions taken on or prior to the date hereof pursuant to subsections 3.1M, 3.1N,
5.8, 5.9 and 5.11 and (y) the delivery to
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Collateral Agent of any Pledged Collateral of the Loan 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 Loan Parties (which Lien has
priority over any other Lien on such Collateral, subject to Permitted
Encumbrances and Liens permitted under subsection 6.2A), 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 Loan 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
4.15A, (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 Loan 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 4.15A and
to evidence Liens permitted pursuant to subsection 6.2, (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 or Administrative Agent by any Loan 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.
4.16 DISCLOSURE.
No representation or warranty of Company or any of its
Subsidiaries contained in any Loan 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 Covanta or any of its Subsidiaries, including any such
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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.
4.17 CASH MANAGEMENT SYSTEM.
The summary of the Cash Management System attached hereto as
Schedule 3.1P 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 3.1P other than Deposit Accounts permitted to
be owned after the Closing Date pursuant to subsection 5.10. There has been no
change to the Cash Management System since the Closing Date except such changes
as are permitted under subsection 5.10 and such other changes as have been
disclosed to Lenders in writing and approved by Administrative Agent.
4.18 MATTERS RELATING TO LOAN PARTIES.
A. LOAN PARTIES. Neither Company nor any of its Subsidiaries
owns any interest in any Domestic Subsidiary which is not a Borrower.
B. DOMESTIC SUBSIDIARY ASSETS. Each Domestic Subsidiary has
granted a Lien in favor of Collateral Agent on substantially all of its property
pursuant to the Collateral Documents.
C. DOMESTIC SUBSIDIARY CAPITAL STOCK. The Capital Stock of
each Domestic Subsidiary which is directly owned by any Loan Party has been
pledged to Collateral Agent pursuant to the Collateral Documents, except for the
Capital Stock of those Domestic Subsidiaries (other than Borrowers) (i) which is
subject to a Lien permitted under subsection 6.2A securing Indebtedness
permitted under subsection 6.1, 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 Loan Party or such
Domestic Subsidiary.
D. FOREIGN SUBSIDIARY CAPITAL STOCK. 65% of the Capital Stock
of each Foreign Subsidiary which is a Material Subsidiary and is directly owned
by Borrowers (or such
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lesser percentage as is owned by Borrowers ) has been pledged to Administrative
Agent pursuant to the Collateral Documents except for the Capital Stock of those
Foreign Subsidiaries 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 Foreign Subsidiary.
E. COMPANY CAPITAL STOCK. The outstanding common stock of
Company has been pledged to Collateral Agent pursuant to the CEA Stock Pledge
Agreement. No Contractual Obligations are in effect which would be violated by a
pledge of the common stock of Company pursuant to the CEA Stock Pledge
Agreement.
Notwithstanding the foregoing, the failure to xxxxx x Xxxx
after the Closing Date on assets of Company and its Subsidiaries or to pledge
Capital Stock of a Subsidiary shall not constitute a breach of the
representations and warranties contained in subsections 4.18B, 4.18C and 4.18D
above on any date after the Closing Date if, at the time of the making of such
representation or warranty on any such date, Borrowers are not otherwise in
default of their obligations under subsection 5.8 and have commenced and are
diligently pursuing appropriate actions to create such Lien or pledge to the
extent such Lien or pledge is required under such subsection; provided, however,
that nothing in this sentence shall be construed as waiving any of the
conditions contained in subsection 3.1.
4.19 INVESTIGATION.
All obligations in existence immediately after the Closing Date (other
than obligations that do not, in the aggregate, exceed $2,000,000) to extend
credit or credit support or obtain the extension of credit or credit support or
to make investments or expenditures with respect to existing or future Projects
of any Borrower or any Subsidiary of any Borrower that are contained in
Contractual Obligations or of which Borrowers are otherwise aware have been
disclosed to Administrative Agent 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.
4.20 MATTERS RELATING TO BANKRUPTCY PROCEEDINGS.
A. PLAN OF REORGANIZATION. As of the Closing Date, there have
been no material modifications, amendments revisions or restatements of the
Approved Plan of Reorganization. Any representation and warranty made by Covanta
or any of its Subsidiaries 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.
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4.21 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.
4.22 REPORTING TO IRS.
Company does not intend to treat the Loans 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 Loans as
part of a transaction that is subject to Treasury Regulation section 1.6011-4 or
section 301.6112-1, and Administrative Agent and such Lender or Lenders, as
applicable, may file such IRS forms or maintain such lists and other records as
they may determine is required by such Treasury Regulations.
SECTION 5. COMPANY'S AFFIRMATIVE COVENANTS
Borrowers covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all
Obligations, 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 5.
5.1 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, except as expressly provided below, promptly after receipt thereof
Administrative Agent will deliver a copy to each Lender):
(i) Budget Report; Budget and Asset Sale 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
5.1(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, (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
71
projections contained in such supplement are based upon good faith
estimates and assumptions believed by Company to be reasonable at the
time made, and (c) a report on all Asset Sales consummated prior to
such date, describing in reasonable detail the properties sold, the
consideration received and the expenses deducted from Gross Receipts
therefor to calculate Net Asset Sale Proceeds, together with a progress
report in reasonable detail describing efforts being made to sell
additional assets of Company and its Subsidiaries (such progress report
described in this clause (c) to be provided solely to Administrative
Agent);
(ii) Events of Default, etc.: promptly upon any Officer of
Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a
claimed Event of Default or Potential Event of Default, (b) that any
Person has given any notice to Company or any of its Subsidiaries or
taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 7.2, (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 Covanta files a
quarterly report on Form 10Q with the Securities and Exchange
Commission for any Fiscal Quarter containing consolidating financial
statements for Company and its Subsidiaries, Borrowers shall be
required to deliver a copy of such quarterly report in lieu of the
financial statements described in this subsection 5.1(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
72
consolidating statements of income, stockholders' equity and cash flows
of Company and its Subsidiaries for such Fiscal Year, setting forth in
each case in comparative form the corresponding figures for the
previous Fiscal Year, all in reasonable detail and certified by the
chief financial officer of Company that they fairly present, in all
material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, and (b) an
audit report thereon of independent certified public accountants of
recognized national standing selected by Company and satisfactory to
Administrative Agent, which report shall (with respect to the audits
for all Fiscal Years after 2003) be unqualified, shall express no
doubts, assumptions or qualifications concerning the ability of Company
and its Subsidiaries to continue as a going concern, and shall (with
respect to the audits for all Fiscal Years including 2003) state that
in the opinion of such certified public accountants such consolidated
financial statements fairly present, in all material respects, the
consolidated financial position of Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP and that the
audit by such accountants in connection with such consolidated
financial statements has been made in accordance with auditing
standards generally accepted in the United States; provided, however,
that so long as Covanta files an annual report on Form 10K with the
Securities and Exchange Commission containing consolidating financial
statements for Company and its Subsidiaries, 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; (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 6, in each case to the extent compliance with such restrictions
is required to be tested at the end of the applicable accounting
period; and (c) a certificate of the chief financial officer of Company
stating that Company and its Subsidiaries have transferred to Deposit
Accounts of Company located in the United States in the Cash Management
System all funds of Company and its Subsidiaries on deposit in accounts
located outside the United States that are required to be transferred
pursuant to subsection 5.10B;
(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
73
subsection 4.3, the consolidated financial statements of Company and
its Subsidiaries delivered pursuant to subdivisions (iii) or (iv) of
this subsection 5.1 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 5.1 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 5.1 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 6.6) which would
have resulted if such financial statements had been prepared without
giving effect to such change;
(vii) Accountants' Certification: together with each
delivery of consolidated financial statements of Company and its
Subsidiaries pursuant to subdivision (iv) above, a written statement by
the independent certified public accountants giving the report thereon
stating that in connection with their audit, nothing came to their
attention that caused them to believe that Company failed to comply
with the terms, provisions or conditions of subsection 6.6, 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 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 Covanta 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 Covanta or
any of its Subsidiaries to the public concerning material developments
in the business of Company or any of its Subsidiaries;
74
(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 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);
75
(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 2007, in each case with respect to each line item described
in the Budget for the current Fiscal Year, which budget shall be
accompanied by an Officer's Certificate from the chief financial
officer of Company certifying that the projections contained in such
budget are based upon good faith estimates and assumptions believed by
Company to be reasonable at the time made;
(xvii) 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 Agent
or Requisite Lenders (or by any Lender so long as such request is made
through Administrative Agent (and Administrative Agent shall be
required to request from Borrowers any such information and data
reasonably requested by a Lender)); and
(xviii) 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.
5.2 EXISTENCE, ETC.
Except as permitted under subsection 6.7, 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.
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5.3 PAYMENT OF TAXES AND CLAIMS; TAX.
A. 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 conclusively operate to stay the sale of any
portion of the Collateral to satisfy such charge or claim.
B. Borrowers will not file or consent to the filing of any
consolidated income tax return with any Person (other than Company or any of its
Subsidiaries).
5.4 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 Non 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 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
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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
5.4 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 5.4.
C. APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.
(i) Business Interruption Insurance. Upon receipt by
Company or any of its Subsidiaries of any business interruption
insurance proceeds constituting Net Insurance/Condemnation Proceeds,
(a) so long as no Event of Default or Potential Event of Default shall
have occurred and be continuing, Company or such Subsidiary may retain
and apply such Net Insurance/Condemnation Proceeds for working capital
purposes or any other purposes not prohibited under this Agreement, and
(b) if an Event of Default or Potential Event of Default shall have
occurred and be continuing, Company shall apply an amount equal to such
Net Insurance/Condemnation Proceeds as provided in subsection 2.4A.
(ii) Net Insurance/Condemnation Proceeds Received by
Company. Upon receipt by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds other than from business interruption
insurance, (a) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing, Company shall, or shall
cause one or more of its Subsidiaries to, promptly and diligently apply
such Net Insurance/Condemnation Proceeds to pay or reimburse the costs
of repairing, restoring or replacing the assets in respect of which
such Net Insurance/Condemnation Proceeds were received or, to the
extent not so applied, as provided in subsection 2.4A, and (b) if an
Event of Default or Potential Event of Default shall have occurred and
be continuing (unless Company is otherwise required to use funds by law
or contract), Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds as provided in subsection 2.4A.
(iii) Net Insurance/Condemnation Proceeds Received by
Administrative Agent or Collateral Agent. Upon receipt by
Administrative Agent or Collateral Agent, as the case may be, of any
Net Insurance/Condemnation Proceeds as loss payee, (a) if and to the
extent Company would have been required to apply such Net
Insurance/Condemnation Proceeds (if it had received them directly)
Administrative Agent or Collateral Agent, as the case may be, shall,
and Company hereby authorizes Administrative Agent or Collateral Agent,
as the case may be, to, apply such Net Insurance/Condemnation Proceeds
as provided in subsection 2.4A, and (b) to the extent the foregoing
clause (a) does not apply Administrative Agent or Collateral Agent, as
the case may be, shall
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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, as the case may be, to, apply
such Net Insurance/Condemnation Proceeds as provided in subsection
2.4A.
Notwithstanding the foregoing, no Net Insurance/Condemnation
Proceeds shall be required to be applied as provided in subsection 2.4A to the
extent such application would constitute a material violation of (1) a valid
Contractual Obligation (in effect on the Closing Date or arising under the
documentation for Non 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 5.4C and the terms of
the Intercreditor Agreement, the terms of the Intercreditor Agreement shall
prevail.
5.5 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 from time to time, all at Borrowers'
expense.
B. LENDER MEETING. Company will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.
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5.6 COMPLIANCE WITH LAWS, ETC.
Borrowers shall comply, and shall cause each of their
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.
5.7 ENVIRONMENTAL MATTERS.
A. ENVIRONMENTAL DISCLOSURE. Company will deliver to
Administrative Agent:
(i) Environmental Audits and Reports. As soon as
practicable following receipt thereof, copies of all environmental
audits, investigations, analyses and reports of any kind or character
(excluding writings which are protected by attorney-client privilege or
the work-product doctrine or confidential self-evaluative writings),
whether prepared by personnel of Company or any of its Subsidiaries or
by independent consultants, governmental authorities or any other
Persons, with respect to significant environmental matters at any
Facility that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect or impose liability on
any Lender or 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
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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 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 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 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 5.7B,
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
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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.
5.8 EXECUTION OF THE PERSONAL PROPERTY COLLATERAL DOCUMENTS AFTER
THE CLOSING DATE.
A. FOREIGN PLEDGE AGREEMENTS. As soon as practicable (but not
more than 90 days, unless rendered impracticable by events or by action or
inaction of foreign Governmental Authorities in each case beyond the control of
Borrowers (as determined in the reasonable judgment of Administrative Agent))
after the Closing Date (to the extent not completed on or prior to the Closing
Date), Borrowers shall cause Foreign Pledge Agreements to be executed and
delivered to Administrative Agent with respect to 65% of the Capital Stock of
all Foreign Subsidiaries which are Material Subsidiaries and are directly owned
by any Borrower (other than to the extent a pledge of such Capital Stock under
the Collateral Documents would constitute a material violation of (1) a valid
Contractual Obligation in favor of or for the benefit of a Person other than
Company or any of its Subsidiaries for which the required consents have not been
obtained or (2) applicable law affecting such Borrower or such Foreign
Subsidiary), shall take all such other actions under the laws of such
jurisdictions as Administrative Agent may deem necessary or advisable to perfect
or otherwise protect the Liens purported to be created in such Capital Stock
under the Collateral Documents, and shall deliver to Administrative Agent an
opinion of counsel (which counsel shall be reasonably satisfactory to
Administrative Agent) under the laws of each jurisdiction in which (i) any
Borrower holding stock of the relevant Foreign Subsidiary is organized with
respect to the due authorization, execution and delivery of such Foreign Pledge
Agreement by such Borrower, and (ii) such Foreign Subsidiary is organized with
respect to customary matters regarding enforceability, validity and perfection
of such pledge.
B. 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 a pledge of the Capital Stock of any
Subsidiary of a Borrower. 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.
5.9 MATTERS RELATING TO 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
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insurance, environmental reports and other documents as Administrative Agent may
reasonably request, in each case in form and substance reasonably satisfactory
to Administrative Agent, 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.
5.10 DEPOSIT ACCOUNTS; REPATRIATION OF FOREIGN CASH.
A. DOMESTIC DEPOSIT ACCOUNTS. Borrowers shall, and shall cause
each of their Subsidiaries to, maintain the Cash Management System as described
in Schedule 3.1P, as said Schedule 3.1P may be supplemented from time to time
pursuant to clause (c) below, and Company and its Subsidiaries shall not open or
close Deposit Accounts in the United States or make other changes to the Cash
Management System in the United States without the written consent of
Administrative Agent, except that 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 (b)), (b) the aggregate
amount on deposit at any time in all Deposit Accounts in the United States
maintained with depository institutions other than Collateral Agent for which
Control Agreements have not been delivered to Administrative Agent shall not
exceed $50,000, 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 3.1P
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.
B. REPATRIATION OF FOREIGN CASH. At all times Company shall,
and shall cause each of its Subsidiaries to, transfer to Deposit Accounts of
Company located in the United States in the Cash Management System all funds of
Company and its Subsidiaries on deposit in accounts located outside the United
States that can be so transferred, to the extent such transfer (i) would not
constitute a violation of (a) a valid Contractual Obligation in favor of or for
the benefit 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 the
relevant Foreign Subsidiary or Project, and (ii) would not result in material
adverse tax liabilities for Company and its Subsidiaries; provided, however,
that Company and its Subsidiaries may maintain funds that would otherwise be
required to be transferred pursuant to the foregoing provision so long as (1)
such funds so maintained are applied to working capital, capital expenditure,
maintenance, operation, payroll and other liquidity requirements in the ordinary
course of business and (2) the aggregate amount of such funds so maintained at
any time does not exceed $2,000,000 in the aggregate.
5.11 FURTHER ASSURANCES.
A. ASSURANCES. Without expense or cost to Administrative Agent
or Lenders, each Borrower shall from time to time hereafter execute,
acknowledge, file, record, do and
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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
Loan 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 Loan
Documents or the Confirmation Order, registering or recording this Agreement or
any other Loan 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
Loan Document, including any instrument of further assurance described in
subsection 5.11A, 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
Loan Document, including any instrument of further assurance described in
subsection 5.11A, or by reason of its interest in, or measured by amounts
payable under, the Notes, the Mortgages or any other Loan Document, including
any instrument of further assurance described in subsection 5.11A, (excluding
income, franchise and doing business Taxes), and shall pay all stamp Taxes and
other Taxes required to be paid on the Notes or any other Loan Document;
provided, however, that such Borrower may contest in good faith and through
appropriate proceedings, any such Taxes, duties, imposts, assessments and
charges; provided further, however, that such Borrower shall pay all such Taxes,
duties, imposts and charges when due to the appropriate taxing authority during
the pendency of any such proceedings if required to do so to stay enforcement
thereof. If any Borrower fails to make any of the payments described in the
preceding sentence within 10 days after notice thereof from Administrative Agent
(or such shorter period as is necessary to protect the loss of or diminution in
value of any Collateral by reason of tax foreclosure or otherwise, as determined
by Administrative Agent) accompanied by documentation verifying the nature and
amount of such payments, Administrative Agent may (but shall not be obligated
to) pay the amount due and Borrowers shall jointly and severally reimburse all
amounts in accordance with the terms hereof.
C. COSTS OF DEFENDING AND UPHOLDING THE LIEN. Administrative
Agent may, upon at least five days' prior notice to Borrowers, (i) appear in and
defend any action or proceeding, in the name and on behalf of Agent, Lenders or
any Borrower, in which 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,
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any Mortgage, the Lien thereof or any other Loan Document and (ii) institute any
action or proceeding which Administrative Agent reasonably determines should be
instituted to protect the interest or rights of Administrative Agent and Lenders
in any Mortgaged Property or other Collateral or under this Agreement or any
other Loan 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 9.2 hereof.
5.12 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 CPIH Term Loan Documents,
on an equivalent basis (based in the case of fees on the respective amounts of
Loan Exposure outstanding (on one hand) and the credit exposure under the CPIH
Term Loan 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 Loan Documents, and any such payment of
equivalent fees shall be paid in cash concurrently with the fees giving rise to
such equivalent fees.
SECTION 6. BORROWERS' NEGATIVE COVENANTS
Borrowers covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all
Obligations 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 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 obligations under the CPIH Term Loan Agreement;
(ii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations and Performance
Guaranties permitted by subsection 6.4 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 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 Investments permitted under subsection
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6.3(vi) to be made by Company or any of its Subsidiaries in the
Subsidiaries incurring such Indebtedness; provided that (a) 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 6.6D, and (b) any such Indebtedness to any
Borrower shall be evidenced by the Intercompany Master Note;
(v) Company and its Subsidiaries, as applicable, may
remain liable with respect to Indebtedness outstanding on the Closing
Date and described in Schedule 6.1(v);
(vi) 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;
(vii) 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 Subsidiary
permitted to remain outstanding under subsection 6.1(v); 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 oblige or
beneficiary of the Indebtedness so refinanced, replaced, renewed or
extended had immediately prior to such transaction, and (d) Company
shall provide to Administrative Agent reasonable prior advance written
notice of such proposed refinancing, replacement, renewal or extension
and copies of all material contracts or other agreements being entered
into in connection therewith;
(viii) 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 $5,000,000 in the aggregate;
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(ix) Borrowers may become and remain liable with respect
their obligations to pay for services rendered to them and certain
payments made by Covanta and its Subsidiaries (other than Company and
its Subsidiaries), in each case under and in accordance with the
Management Services and Reimbursement Agreement; and
(x) Company and its Subsidiaries may, after the Closing
Date, become and remain liable with respect to Indebtedness to any
Subsidiary so long as the proceeds of such Indebtedness are applied to
make Investments permitted under subsection 6.3(ix); provided that all
such intercompany Indebtedness shall be evidenced by the Intercompany
Master Note.
6.2 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) subject to the provisions of the Intercreditor
Agreement, Liens granted pursuant to the Collateral Documents to secure
the Obligations, the obligations of Borrowers under the CPIH Term Loan
Agreement 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 6.2 annexed hereto;
(iv) Liens on assets of Company or any Subsidiary of
Company securing refinancing Indebtedness permitted by subsection
6.1(vii), 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
6.1(vii);
(v) Liens on cash collateral of Subsidiaries of Company
securing Contingent Obligations permitted under subsection 6.4(v), 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;
(vi) Liens on cash collateral of Company securing
insurance deductibles or self-insurance retentions required by third
party insurers in connection with insurance
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arrangements entered into by Company and its Subsidiaries with such
insurers in compliance with subsection 5.4B;
(vii) 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;
(viii) 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;
(ix) Liens on cash collateral of Subsidiaries of Company
securing Contingent Obligations permitted under subsection 6.4(iv), 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; and
(x) Other Liens on assets of any Subsidiary of Company
securing Indebtedness in an aggregate amount not exceeding $1,000,000.
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 6.2A and Liens created or assumed on properties or
assets on which First Priority Liens created under the Collateral Documents are
attached and perfected at the time of such creation or assumption, the Borrowers
hereby agree that (i) they will be deemed to have automatically and without
further action secured the Obligations with such Lien equally and ratably with
any and all other Indebtedness, Contingent Obligations or any other obligations
or debt (as defined in the Bankruptcy Code) secured thereby, and (ii) they shall
take or cause to be taken such actions as Administrative Agent or Requisite
Lenders deem necessary or advisable to evidence such equal and ratable Lien;
provided that, notwithstanding the foregoing, this covenant shall not be
construed as a consent by Requisite Lenders to the creation or assumption of any
such Lien not permitted by the provisions of subsection 6.2A, and the creation
or assumption of any such Lien not permitted by the provisions of subsection
6.2A 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 Loan
Documents and the CPIH Term Loan Documents) 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
88
with respect to (i) specific property encumbered by a Lien permitted hereunder
to secure payment of particular Indebtedness permitted to be incurred under
subsection 6.1(vii) (but only to the extent that the Indebtedness being
refinanced was subject to a negative pledge on the same assets), or by a Lien
permitted under subsection 6.2A(v), 6.2A(vi), 6.2A(vii) or 6.2A(ix), or by a
Lien permitted under subsection 6.2A(x) to the extent such Lien secures
obligations 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, and (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.
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 Loan Documents, (b) those encumbrances or
restrictions applicable to Subsidiaries of Company to the extent created under
documentation in existence on the Closing Date or under the CPIH Term Documents,
(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.
6.3 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 Domestic 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
89
the terms of any Project bond indenture) permitted hereunder; and
Company's Foreign Subsidiaries may make and own Investments in Foreign
Cash Equivalents to the extent permitted under subsection 5.10;
(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 6.2D 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;
(iii) Company and its Subsidiaries may make intercompany
loans to the extent permitted under subsection 6.1(iii);
(iv) Company and its Subsidiaries may make Consolidated
Facilities Capital Expenditures permitted by subsection 6.6D;
(v) Company and its Subsidiaries may continue to own the
Investments owned by them on the Closing Date and described in Schedule
6.3(v) annexed hereto;
(vi) (a) Company may make and own Investments consisting
of intercompany loans to its Subsidiaries (to the extent such
Subsidiaries are in existence on the Closing Date) in an aggregate
amount not in excess of $1,000,000 outstanding at any time and (b)
Subsidiaries may make and own Investments consisting of intercompany
loans to other Subsidiaries (in each case to the extent such
Subsidiaries are in existence on the Closing Date), so long as the
proceeds of such loans are applied to working capital, capital
expenditure, maintenance and payroll requirements in the ordinary
course of business of such Subsidiaries (provided that the aggregate
amount of loans outstanding pursuant to this clause (b) shall not at
any time exceed $2,000,000);
(vii) Borrowers and their Subsidiaries may own Investments
in the form of non-cash consideration received in connection with (a)
Asset Sales permitted under subsection 6.7(iii) or 6.7(iv) or (b)
settlements of disputes, to the extent such settlements occur in the
ordinary course of business;
(viii) Subject to the Intercreditor Agreement, Borrowers may
make payments under the Management Services and Reimbursement Agreement
to the extent contractually obligated pursuant to the terms thereof;
and
(ix) Company and its Subsidiaries may make and own
Investments consisting of cash equity contributions made after the
Closing Date (a) in the aggregate amount of approximately $360,000 (it
being understood that such amount is the approximate Dollar equivalent
of an estimate as of November 15, 2003 of the required foreign currency
contribution, and thus may change based on fluctuations in currency
exchange rates) in the Madurai Project, (b) in an aggregate amount not
to exceed $130,000 in the Samalpatti Project, and (c) in an aggregate
amount not to exceed $1,600,000 in the Trezzo waste-to-
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energy Project, in each case so long as (1) such contributions are
required to be made pursuant to the terms of a binding Contractual
Obligation of Company and its Subsidiaries in effect on the Closing
Date, and (2) any Capital Stock resulting from such contributions and
held directly by any Borrower shall be pledged as Collateral under the
Collateral Documents.
6.4 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
(b) with respect to Contingent Obligations under the Management
Services and Reimbursement Agreement;
(ii) 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;
(iii) Company and its Subsidiaries, as applicable, may
become and remain liable with respect to (a) Contingent Obligations in
existence on the Closing Date and described in Schedule 6.4(iii)
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;
(iv) 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;
(v) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations constituting Hedge
Agreements;
(vi) Company and its Subsidiaries may become and remain
liable with respect to usual and customary Contingent Obligations
incurred in connection with insurance deductibles or self-insurance
retentions required by third party insurers in connection with
insurance arrangements entered into by Company and its Subsidiaries
with such insurers in compliance with subsection 5.4B; and
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(vii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations under the Management
Services and Reimbursement Agreement.
6.5 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) Subsidiaries of
Company may make payments of principal, interest and other amounts in respect of
Indebtedness permitted under subsections 6.1(v) and 6.1(vii) related to
Projects, in accordance with the terms of, and only to the extent required by,
the indentures or other agreements pursuant to which such Indebtedness was
issued, as such 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 6.1(v) and 6.1(vii) related to Projects unless it has an irrevocable
Contractual Obligation to make such payments; (ii) 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
6.1 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 Non Recourse Debt
during the continuance of an Event of Default so long as such payments are from
the proceeds of Non 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; (iii) Company and its Subsidiaries may
pay any fees required to be paid to the Administrative Agent and Lenders
hereunder; and (iv) Company and its Subsidiaries may make payments under and in
accordance with the terms of, and only to the extent required by, the Management
Services and Reimbursement Agreement and the Tax Sharing Agreement.
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.
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6.6 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 commencing after March 31, 2004 to be less than 3.00:1.00.
B. MAXIMUM CONSOLIDATED LEVERAGE RATIO. Company shall not
permit the Consolidated Leverage Ratio as at any date on or after June 30, 2004
to exceed 5.00:1.00.
C. [INTENTIONALLY OMITTED].
D. CONSOLIDATED FACILITIES CAPITAL EXPENDITURES. Borrowers
shall not, and shall not permit their respective Subsidiaries to, make or incur
Consolidated Facilities Capital Expenditures after the Closing Date if the
aggregate amount of such expenditures financed by contributions, loans or
advances from Company would exceed $1,000,000 in the aggregate.
E. 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 6.6E annexed hereto; and
(ii) for purposes of determining compliance with subsection 6.6A 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.
6.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES.
Borrowers shall not, and shall not permit their respective
Subsidiaries to, alter the legal form of organization of Company or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),
transfer or otherwise dispose of (including by discount or compromise), in one
transaction or a series of transactions, all or any part of its business,
property or assets (including its notes or receivables and Capital Stock of a
Subsidiary, whether newly issued or outstanding) or its interests in or claims
against any Project, in each case whether now owned or hereafter acquired,
except:
(i) any Borrower may be merged with or into a Borrower,
or be liquidated, wound up or dissolved, or all or any part of its
business, property or assets may be conveyed, sold, leased, transferred
or otherwise disposed of, in one transaction or a series of
transactions, to a Borrower; provided that, no such transaction shall
result in 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;
93
(ii) 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
further, 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;
(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;
(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 non-cash
consideration received shall be reasonably satisfactory to
Administrative Agent; (e) the principal documentation for each such
Asset Sale shall have been delivered in advance to Administrative
Agent; (f) upon consummation of each such Asset Sale, neither Company
nor any of its Subsidiaries shall have any debts or obligations,
contingent or otherwise, relating to the sold entities or assets (other
than customary indemnification obligations and purchase price
adjustment obligations incurred in connection with such Asset Sale);
(g) any Indebtedness in relation to such assets shall be repaid and the
related letters of credit shall be cancelled and returned to the
issuers thereof; (h) any Asset Sale or series of related Asset Sales
(1) in which the consideration to be received (other than the
assumption of liabilities related to such assets) exceeds $15,000,0000
shall require the prior written consent of the Requisite Lenders, (2)
of the Quezon Project or involving any assets or property comprising
the Quezon Project shall require the prior written consent of Requisite
Lenders and (3) in which the consideration to be received (other than
the assumption of liabilities related to such assets) exceeds
$5,000,000 shall require the delivery no later than 30 days prior to
the consummation of such Asset Sale or Asset Sales of an independent
appraisal of the fair market value of such assets subject thereto which
appraisal shall be performed by an appraiser satisfactory to
Administrative Agent and shall be in form and substance satisfactory in
all respects to Administrative Agent and (i) the Net Asset Sale
Proceeds of such Asset Sales shall be applied as Mandatory Payments to
the extent required under subsection 2.4A;
(v) Any Subsidiary of Company may, if its Board of
Directors determines that doing so is in the best interests of such
Subsidiary, change its legal form of organization
94
to a limited liability company, a corporation or a limited partnership;
provided that (a) (1) if such Subsidiary is a Borrower, such Subsidiary
shall have executed such documents as Administrative Agent reasonably
deems necessary to ensure that such Subsidiary continues to be bound as
a Borrower under the Loan Documents after such change and (2) if all or
any portion of the equity interests of such Subsidiary are subject to
Liens created under the Collateral Documents prior to such change, the
same percentage of the equity interests of such Subsidiary shall
continue to be subject to Liens under the Collateral Documents after
such change, with such Liens being of equal or higher priority than
before such change and, if perfected prior to such change, perfected,
and (b) Company and its Subsidiaries shall have complied with the
provisions of the Collateral Documents applicable to such change of
legal form; and
(vi) Covanta Energy India (Balaji) Ltd. may sell
approximately 372,860 shares held by it on the Closing Date in the
Madurai Project entity, Madurai Power Corp. Pvt. Ltd. (the "MADURAI
PROJECT ENTITY"), to the Indian local partner with respect to the
Madurai Project for approximately $575,000 (it being understood that
such amount is the approximate Dollar equivalent of an estimate as of
November 15, 2003 of the proceeds from such sale, and thus may change
based on fluctuations in currency exchange rates), to the extent such
local partner requires such sale so that such local partner will hold,
after giving effect to such sale, up to 25.2% of the issued and
outstanding Capital Stock of the Madurai Project Entity.
6.8 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 6.1 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) the Employment Agreements in effect on
the Closing Date, and any other 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
95
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 Tax Sharing Agreement and the other Related
Agreements, (vi) transactions occurring on the Closing Date and described on
Schedule 6.8 annexed hereto, (vii) services rendered by certain Subsidiaries for
the benefit of other Subsidiaries pursuant to the terms of the intercompany
service agreements described on Schedule 6.8 annexed hereto, and (viii) 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.
6.9 RESTRICTION ON LEASES.
Borrowers shall not, and shall not permit any of their
Subsidiaries to, become liable in any way, whether directly by assignment or as
a guarantor or other surety, for the obligations of the lessee under any lease
for equipment (other than intercompany leases between Borrowers), unless,
immediately after giving effect to the incurrence of liability with respect to
such lease, the aggregate amount of all rents paid or payable by Company and its
Subsidiaries on a consolidated basis under all such leases entered into after
the Closing Date at the time in effect during the then current Fiscal Year or
any future period of 12 consecutive calendar months shall not exceed $1,000,000;
provided, however, that this subsection 6.9 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.
6.10 [INTENTIONALLY OMITTED].
6.11 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 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.
6.12 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 any of (i) the Management Services and Reimbursement Agreement or
the other Related Agreements (other than the CPIH Term Loan 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) is to impose additional material obligations on, or confer additional
material rights to the holders thereof (or to other obligees with respect
thereto) against, Company or any of its Subsidiaries, or (b) is otherwise
adverse to the interests of the Lenders in a manner deemed material in the
judgment of Administrative Agent or Requisite Lenders so notifying Agent or
Company; (ii) the
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Organizational Documents of Company and its Subsidiaries, if the effect of such
amendment, restatement, modification or waiver, together with all other
amendments, restatements, modifications or waivers made, is adverse to the
interests of the Lenders in a manner deemed material in the judgment of
Administrative Agent or Requisite Lenders; (iii) the Subordinated Indebtedness,
if the effect thereof would be to (a) change to earlier dates the dates on which
any payments of principal or interest are due thereon, (b) increase the interest
rate, or the portion thereof payable on a current basis in cash, applicable
thereto, (c) change any event of default with respect thereto in any manner
adverse to the interests of the Lenders, (d) change the redemption, prepayment
or defeasance provisions thereof, (e) change the subordination provisions
thereof (or of any guaranty thereof or intercreditor arrangement with respect
thereto), (f) change any collateral therefor (other than to release such
collateral), or (g) change any other term or provision thereof, if the effect of
such change, together with all other changes made, is to increase materially the
obligations of the obligor thereunder or to confer any additional rights on the
holders of such Indebtedness that would be materially adverse (in the judgment
of Administrative Agent or Requisite Lenders so notifying Agent or Company) to
Company, Administrative Agent or the Lenders, without the prior written consent
of Requisite Lenders; (iv) the principal documents relating to Non 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 CPIH Term Loan Documents, unless (a) the terms of the CPIH Term Loan
Documents as so amended, restated, modified or waived are not more
disadvantageous to Company and its Subsidiaries and the Lenders (in a manner
deemed material by Administrative Agent or Requisite Lenders so notifying
Administrative Agent or Company) than the CPIH Term Loan Documents in effect on
the Closing Date (it being understood and agreed that any amendment,
restatement, modification or waiver having the effect of increasing the amount
of, or reducing, delaying or waiving any otherwise required reduction in the
amount of, any commitment to extend loans under the CPIH Term Loan Documents
shall be deemed to be more disadvantageous for purposes of this clause (a)
without further notice or other action by Agent or Requisite Lenders), (b) the
aggregate amount of Indebtedness outstanding, and additional commitments to
extend credit, if any, under the CPIH Term Loan Documents as so amended,
restated, modified or waived, do not exceed the aggregate amount of the
commitments to extend credit in effect under the CPIH Term Loan Documents on the
Closing Date, (c) the obligations under (and the Liens securing) such CPIH Term
Loan 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 CPIH Term Loan Documents on the Closing
Date, and (d) Company provides to Administrative Agent reasonable prior advance
written notice of such proposed amendment, restatement, modification or waiver
and copies of all material contracts or other agreements being entered into in
connection therewith).
6.13 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.
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6.14 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 4.11D
hereof), unless such amendment or modification is required under applicable law.
SECTION 7. EVENTS OF DEFAULT
If any of the following conditions or events ("EVENT OF
DEFAULT") shall occur:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Borrowers to pay any installment of principal of
any Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; 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
7.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries (other
than the Magellan Subsidiary) to pay when due any principal of or
interest on or any other amount payable in respect of (a) the CPIH Term
Loan Documents, (b) Management Services and Reimbursement Agreement,
(c) any one or more items of Indebtedness (other than Indebtedness
referred to in subsection 7.1 or in clause (a) above or clause (d)
below) or Contingent Obligations or Performance Guaranties, in each
case in the principal amount of $2,000,000 or more, individually or in
the aggregate, or (d) Non Recourse Debt of Subsidiaries of Company in
the principal amount of $6,000,000 or more, individually or in the
aggregate (provided that Non 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 Non Recourse Debt solely for purposes of
this clause (d)), in each case beyond the end of any grace period
provided therefor; or
(ii) breach or default by Company or any of its
Subsidiaries with respect to any other material term of (a) the CPIH
Term Loan Documents or Management Services and Reimbursement Agreement,
(b) one or more items of Indebtedness (other than Non 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
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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
7.3 BREACH OF CERTAIN COVENANTS.
Failure of any Borrower to perform or comply with any term or
condition contained in subsection 2.5 or 5.2 or Section 6 of this Agreement; or
7.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement
made by CEA or Company or any of its Subsidiaries in any Loan Document or in any
statement or certificate at any time given by CEA or 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
7.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or
compliance with any term contained in this Agreement or any of the other Loan
Documents, other than any such term referred to in any other subsection of this
Section 7, and such default shall not have been remedied or waived within 30
days after the earlier of (i) an Officer of Company or such Loan Party becoming
aware of such default or (ii) receipt by Company or such Loan Party of notice
from Administrative Agent or any Lender of such default; or
7.6 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 CEA or Company or any
of its Subsidiaries (other than the Magellan Subsidiary) 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 CEA or
Company or any of its Subsidiaries (other than the Magellan Subsidiary)
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 CEA or Company or any of
its Subsidiaries (other than the Magellan Subsidiary), 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 CEA or Company or any of its Subsidiaries
(other than the Magellan Subsidiary) 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
CEA or Company or any of its Subsidiaries (other than the
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Magellan Subsidiary), and any such event described in this clause (ii)
shall continue for 60 days unless dismissed, bonded or discharged; or
7.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) CEA or Company or any of its Subsidiaries (other than
the Magellan Subsidiary) 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 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 CEA or
Company or any of its Subsidiaries (other than the Magellan Subsidiary)
shall make any assignment for the benefit of creditors; or
(ii) CEA or Company or any of its Subsidiaries (other than
the Magellan Subsidiary) 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 Company or any of its Subsidiaries
(other than the Magellan Subsidiary) (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
7.8 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 $2,000,000
or (b) in the aggregate at any time an amount in excess of $2,000,000 (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 Magellan Subsidiary) 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
7.9 DISSOLUTION.
Any order, judgment or decree shall be entered against CEA or
Company or any of its Material Subsidiaries decreeing the dissolution or split
up of CEA or Company or that Subsidiary and such order shall remain undischarged
or unstayed for a period in excess of 30 days; or
7.10 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 each Pension
Plan, the actuarial valuation as of such January 1, or if no such valuation was
performed as of such January 1 but was performed within the preceding 12 months,
the date as of which the
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valuation was so performed), 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 the 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
7.11 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
7.12 CHANGE IN CONTROL.
A Change in Control shall have occurred; or
7.13 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 CEA, Company
or any Material Subsidiary of Company) 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 4.15A) 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 Loan Party shall contest the validity or enforceability of any Loan
Document in writing or deny in writing that it has any further liability,
including with respect to future advances by Lenders, under any Loan Document to
which it is a party; or
7.14 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 (other than
the power purchase agreement relating to the Magellan Project unless the
termination of such agreement would result in a Material Adverse Effect), 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 such Material
Contract is replaced within ten (10) days after such termination with a contract
that is reasonably acceptable to the
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Requisite Lenders and on substantially the same economic terms as the relevant
Material Contract being terminated; or
7.15 DEFAULT UNDER EXISTING IPP INTERNATIONAL PROJECT GUARANTIES.
Failure by Covanta or any of its Subsidiaries to pay when due
any principal of, interest on or any other amount payable in respect of any
Existing IPP International Project Guaranty (other than the failure to pay
amounts that are being actively contested by such Person in good faith by
appropriate proceedings, so long as the beneficiary of such Existing IPP
International Project Guaranty has not exercised any remedy against Company or
any of its Subsidiaries thereunder, under applicable law or otherwise as a
result of such failure:
THEN (i) upon the occurrence of any Event of Default described in subsection 7.6
or 7.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, 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 the
obligation of each Lender to make any Loan shall thereupon terminate, and (ii)
upon the occurrence and during the continuation of any other Event of Default,
Administrative Agent shall, upon the written request or with the written consent
of Requisite Lenders, by written notice to Borrowers, declare all or any portion
of the amounts described in clauses (a) through (c) above to be, and the same
shall forthwith become, immediately due and payable, and the obligation of each
Lender to make any Loan hereunder shall thereupon terminate.
Any amounts described in clause (b) above, when received by
Collateral Agent, shall be held by Collateral Agent pursuant to the terms of the
Security Agreement and shall be applied as therein provided (subject to the
terms of the Intercreditor Agreement).
Further upon the occurrence and during the continuance of any
Event of Default, subject to the Intercreditor Agreement, Administrative Agent
and Collateral Agent may, and upon the written request of Requisite Lenders
shall, (i) exercise all rights and remedies of Administrative Agent or
Collateral Agent set forth in any of the Collateral Documents, in addition to
all rights and remedies allowed by, the United States and of any state thereof,
including but not limited to the UCC, and (ii) revoke Borrowers' rights to use
cash collateral in which Administrative Agent or Collateral Agent has an
interest. The enumeration of the foregoing rights and remedies is not intended
to be exhaustive and the 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 8. ADMINISTRATIVE AGENT
8.1 APPOINTMENT.
A. APPOINTMENT OF ADMINISTRATIVE AGENT. Deutsche Bank is
hereby appointed Administrative Agent under the other Loan Documents. Each
Lender hereby authorizes each Agent to act as its agent in accordance with the
terms of this Agreement and the other Loan Documents. Each Agent agrees to act
upon the express conditions contained in this Agreement and the other Loan
Documents, as applicable. The provisions of this Section 8 are solely for the
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benefit of Administrative Agent and Lenders and no Loan 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 2.1C) 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 Loan
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.
8.2 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 Loan
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
Loan 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 Loan Documents, a
fiduciary relationship in respect of any Lender or any Borrower; and nothing in
this Agreement or any of the other Loan Documents, expressed or implied, is
intended to or shall be so construed as to impose upon Agent any obligations in
respect of this Agreement or any of the other Loan 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 Loan 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 Loan
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 Loan Documents or as
to the use of the proceeds of the Loans 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
outstanding Loans 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 Loan Documents
except to the extent caused by such Agent's gross negligence or willful
misconduct. An Agent shall be entitled to refrain from any act or the taking of
any action (including the failure to take an action) in connection with this
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Agreement or any of the other Loan 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 9.6) 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 Agent as a result of such Agent
acting or (where so instructed) refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 9.6).
D. ADMINISTRATIVE AGENT ENTITLED TO ACT AS LENDER. The agency
hereby created shall in no way impair or affect any of the rights and powers of,
or impose any duties or obligations upon, Agent in its individual capacity as a
Lender hereunder. With respect to its participation in the Loans, 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 its 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 Administrative Agent shall be
under no obligation to provide such information to them.
8.3 INDEPENDENT INVESTIGATION BY LENDERS; NO RESPONSIBILITY FOR
APPRAISAL OF CREDITWORTHINESS.
Each Lender agrees that it has made its own independent
investigation of the financial condition and affairs of Company and its
Subsidiaries in connection with the making of the Loans 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 making of the Loans 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.
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8.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify Administrative Agent 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
Administrative Agent) or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against Agent or and other such
Persons in exercising the powers, rights and remedies of Agent or performing
duties of Agent hereunder or under the other Loan Documents or otherwise in its
capacity as Agent in any way relating to or arising out of this Agreement or the
other Loan 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 Agent resulting from such Agent's
gross negligence or willful misconduct. If any indemnity furnished to 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.
8.5 SUCCESSOR AGENTS.
Agent may resign at any time by giving 30 days' prior written
notice thereof to Lenders and Borrowers, and Agent may be removed at any time
with or without cause by an instrument or concurrent instruments in writing
delivered to Borrowers and Agent and signed by Requisite Lenders. 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 to
Agent. If, within 30 days after the date of the Agent's notice of its intention
to resign, no successor to Agent shall have been so appointed by Requisite
Lenders, then the 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 Agent hereunder and shall thereafter perform all
the duties of the Agent hereunder and/or under any other Loan Document until the
appointment by Requisite Lenders of some other successor to Agent. Upon the
acceptance of any appointment as Agent hereunder by a successor to Agent,
including, the Lenders as successor to Agent (who shall be deemed to have
accepted such appointment pursuant to this subsection 8.5), such successor to
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Agent and the retiring or
removed Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed Agent's resignation or removal
hereunder as Agent, the provisions of this Section 8 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement and the other Loan Documents.
8.6 COLLATERAL DOCUMENTS AND 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
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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 9.6, all Lenders). Anything contained in any of the Loan 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.
8.7 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 the principal of any Loan
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 the Loans and any
other Obligations that are owing and unpaid and to file such other
papers or documents as may be necessary or advisable in order to have
the claims of Lenders and Administrative Agent (including any claim for
the reasonable compensation, expenses, disbursements and advances of
Lenders and Administrative Agent and their agents and counsel and all
other amounts due Lenders and Administrative Agent under subsections
2.3 and 9.2) 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 Administrative Agent and
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their agents and counsel, and any other amounts due Administrative Agent under
subsections 2.3 and 9.2.
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 9. MISCELLANEOUS
9.1 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS IN
LOANS.
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 9.1). 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).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated hereby, the
Affiliates of each of Administrative Agent and Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement. No Lender shall be
permitted to assign any portion of its rights or obligations hereunder to any
other Person if, upon giving effect to such assignment, Borrowers would be
obligated to pay such assignee amounts greater than the amounts, if any, which
Borrowers would have been required to pay such assigning Lender under subsection
2.6 or 2.7 if such assignment did not occur.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Any Lender may
assign to one or more Eligible Assignees all or any portion of its
rights and obligations under this Agreement; provided that (a) except
(1) in the case of an assignment of the entire remaining amount of the
assigning Lender's rights and obligations under this Agreement or (2)
in the case of an assignment to a Lender or an Affiliate of a Lender or
an Approved Fund of a Lender, the aggregate amount of the Loan 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,
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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 2.6B(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 9.1B(ii), (c) except in the case of
an assignment to another Lender, Administrative Agent shall have
consented thereto (which consent 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 Loans. Upon such execution, delivery and consent, from and
after the effective date specified in such Assignment Agreement, (x)
the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to
such Assignment Agreement, shall have the rights and obligations of a
Lender hereunder, (y) the assignee shall be a party to the
Intercreditor Agreement and, to the extent that rights and obligations
have been assigned to it pursuant to such Assignment Agreement, shall
have the rights and obligations of a "Creditor Party" thereunder (as
such term is defined in the Intercreditor Agreement) and (z) the
assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such
Assignment Agreement, relinquish its rights (other than any rights
which survive the termination of this Agreement under subsection 9.9B)
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 9.9). The assigning Lender of any Commitments and/or Loans
shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its Notes, if any, to
Administrative Agent for cancellation, and thereupon new Notes shall,
if so requested by the assignee and/or the assigning Lender in
accordance with subsection 2.1D, be issued to the assignee and/or to
the assigning Lender, substantially in the form of Exhibit I annexed
hereto, as the case may be, with appropriate insertions, to reflect the
new outstanding Loans, as the case may be, of the assignee and/or the
assigning Lender. Other than as provided in subsection 9.5, any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this subsection 9.1B 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 9.1C. Except as otherwise provided in this subsection 9.1,
no Lender shall, as between Borrowers and such Lender, or as between
Administrative Agent 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
Commitments or Loans, 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 9.1B(i) and any forms, certificates or other evidence with
respect
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to United States federal income tax withholding matters that such
assignee may be required to deliver to Administrative Agent pursuant to
subsection 2.6B(iii), Administrative Agent shall, if Administrative
Agent has consented to the assignment evidenced thereby (to the extent
such consent is required pursuant to subsection 9.1B(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 9.1B(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, Administrative Agent and Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
directly affecting (i) the extension of the Maturity Date or (ii) a reduction of
the principal amount of or the rate of interest payable on any Loan allocated to
such participation. Subject to the further provisions of this subsection 9.1C,
each Borrower agrees that each Participant shall be entitled to the benefits of
subsection 2.6 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to subsection 9.1B. To the extent permitted by
law, each Participant also shall be entitled to the benefits of subsection 9.4
as though it were a Lender; provided that such Participant agrees to be subject
to subsection 9.5 as though it were a Lender. A Participant shall not be
entitled to receive any greater payment under subsection 2.6 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 2.6.
D. PLEDGES AND ASSIGNMENTS. Any Lender may at any time pledge
or assign a security interest in all or any portion of its Loans, and the other
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 in the possession of that Lender from
time to time to assignees and participants (including prospective assignees and
participants), subject to subsection 9.20.
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F. AGREEMENTS OF LENDERS. Each Lender listed on the signature
pages hereof hereby agrees, and each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree, (i) that it is an Eligible
Assignee described in clause (i) of the definition thereof; (ii) that it has
experience and expertise in the making of or purchasing loans such as the Loans;
and (iii) that it will make or purchase Loans for its own account in the
ordinary course of its business and without a view to distribution of such Loans
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 9.1, the disposition of such Loans 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 9.1, any Lender may assign and pledge all or any portion of the Loans
or any other Obligations owed to such Lender hereunder, and its one or more
Notes to any Federal Reserve Bank as collateral security pursuant to Regulation
A of the Board of Governors of the Federal Reserve System and any operating
circular issued by such Federal Reserve Bank; provided that (i) no Lender shall,
as between Company and such Lender, be relieved of any of its obligations
hereunder as a result of any such assignment and pledge and (ii) in no event
shall such Federal Reserve Bank be considered to be a "Lender" or be entitled to
require the assigning Lender to take or omit to take any action hereunder.
9.2 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 Loan Documents and any consents, amendments, waivers or other
modifications thereto; (ii) all the costs of furnishing all opinions by counsel
for Loan Parties (including any opinions requested by Administrative Agent or
Lenders as to any legal matters arising hereunder) and of Borrowers' performance
of and compliance with all agreements and conditions on their part to be
performed or complied with under this Agreement and the other Loan Documents
including with respect to confirming compliance with environmental and insurance
requirements; (iii) the reasonable fees, expenses and disbursements of advisors
and counsel to Administrative Agent (including O'Melveny & Xxxxx LLP, counsel to
Administrative Agent, and Ernst & Young Corporate Finance LLC) in connection
with the negotiation, preparation, execution, interpretation or administration
of the Loan Documents and any proposed consents, amendments, waivers or other
modifications thereto and any other documents or matters requested by any
Borrower; (iv) all the actual costs and reasonable expenses of creating and
perfecting Liens in favor of Collateral Agent on behalf of Secured Parties
pursuant to any Collateral Document, including filing and recording fees,
expenses and taxes, stamp or documentary taxes, search fees, title insurance
premiums, and reasonable fees, expenses and disbursements of counsel to
Administrative Agent and Collateral Agent and of counsel providing any opinions
that Administrative Agent or Requisite Lenders may request in respect of the
Collateral Documents or the Liens created pursuant thereto; (v) all the actual
costs and reasonable fees, expenses and disbursements of any auditors,
accountants or appraisers and any environmental or other consultants, advisors
and agents (including Ernst & Young Corporate Finance LLC) employed or retained
by Administrative Agent or their counsel; (vi) all the actual costs and
reasonable expenses incurred in connection with the custody or
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preservation of any of the Collateral; (vii) all other actual and reasonable
costs and expenses incurred by Administrative Agent in connection with the
syndication of the Commitments; and (viii) all the actual costs and reasonable
expenses, including reasonable attorneys' fees and costs of settlement, incurred
by Administrative Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Loan Party hereunder or under the other
Loan 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.
9.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection
9.2, whether or not the transactions contemplated hereby shall be consummated,
Borrowers jointly and severally agree to defend (subject to Indemnitees'
selection of counsel), indemnify, pay and hold harmless Administrative Agent and
Lenders, and the officers, directors, employees, agents and affiliates of
Administrative Agent and Lenders (collectively called the "INDEMNITEES"), 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 Loan Documents and the Chapter 11
Cases (it being understood that such Indemnified Liabilities arising out of the
Chapter 11 Cases shall apply solely to Indemnitiees in their capacities as
Administrative Agent and Lenders or officers, directors, employees, agents and
affiliates of Administrative Agent or Lenders, and not in any other capacities)
or the transactions contemplated hereby or thereby (including Lenders' agreement
to make the Loans hereunder or the use or intended use of the proceeds thereof,
or any enforcement of any of the Loan 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 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.
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To the extent that the undertakings to defend, indemnify, pay
and hold harmless set forth in this subsection 9.3 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.
9.4 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
Loan Party against and on account of the obligations and liabilities of any
Borrower or any other Loan 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, and the other Loan Documents, including all claims of any nature or
description arising out of or connected with this Agreement, or any other Loan
Document, irrespective of whether or not (i) Agent or any Lender shall have made
any demand hereunder or (ii) the principal of or the interest on the Loans or
any other amounts due hereunder shall have become due and payable pursuant to
Section 7 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.
9.5 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 or mandatory payment
(other than a payment or prepayment of Loans made and applied in accordance with
the terms of this Agreement), by realization upon security, through the exercise
of any right of set-off or banker's lien, by counterclaim or cross action or by
the enforcement of any right under the Loan Documents or otherwise, or as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code, receive payment or reduction of a proportion of the aggregate amount of
principal, interest, amounts payable in respect of Loans, fees and other amounts
then due and owing to that Lender hereunder or under the other Loan Documents
with respect to 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, unless such
proportionately greater payment is required by the terms of this Agreement (i)
notify Administrative Agent and each other Lender of the receipt of such payment
and (ii) apply a portion of such payment to purchase assignments (which it shall
be deemed to have purchased from each seller of an assignment simultaneously
upon the receipt by such seller of its portion of such payment) of the Aggregate
Amounts Due to the other Lenders
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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 9.1B 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. COSTS OF COLLECTION. Notwithstanding anything in this
subsection 9.5 to the contrary, in the event any one or more Lenders (for
purposes of this subsection 9.5B, "ENFORCING LENDERS") receives any amounts that
are subject to the sharing provisions of subsection 9.5A as a result of such
Enforcing Lender or Enforcing Lenders, but not Administrative Agent or all
Lenders, commencing Proceedings to recover such amounts, no Lender that is not
an Enforcing Lender shall be entitled to the benefits of subsection 9.5A 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 subsections if all Lenders paid their Pro Rata Shares of such costs
and expenses.
9.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes or the Loan 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
Loan, (2) increase the maximum aggregate amount of such Lender's Commitment, (3)
postpone the scheduled final maturity date of the Loans, (4) postpone the date
on which any interest or any fees are payable, (5) decrease the interest rate
borne by any Loan (other than any waiver of any increase in the interest rate
applicable to any of the Loans pursuant to subsection 2.2C) or the amount of any
fees payable hereunder, or (6) change in any manner or waive the provisions
contained in subsection 7.1; (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 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
(except that such Lien may be released on all or substantially all Collateral to
the extent such release is required in connection with an Asset Sale or Asset
Sales permitted
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under this Agreement), or release any substantial portion of Borrowers from
their obligations under this Agreement (except that all or any number of
Borrowers may be released from such obligations to the extent such release is
required in connection with an Asset Sale or Asset Sales permitted under this
Agreement), or (4) change in any manner or waive the provisions contained in
subsection 9.6; (c) Administrative Agent, change in any manner the definition of
"Eligible Assignee"; and (d) Administrative Agent, affect the rights or duties
of Administrative Agent (in its capacity as Administrative Agent) under this
Agreement or any other Loan Document.
In addition, (i) no amendment, modification, termination or
waiver of any provision of any Note shall be effective without the written
concurrence of the Lender which is the holder of that Note; and (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 shall be effective without
the written concurrence of Administrative Agent, as the case may be.
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 9.6 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.
9.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
9.8 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 9.8)
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 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
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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 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.
Loan Documents and notices under the Loan 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 Loan Parties, Administrative Agent 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.
9.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein
or in any other Loan Document shall survive the execution and delivery of this
Agreement and the making of the Loans hereunder.
B. Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of Borrowers set forth in subsections 2.6,
9.2, 9.3, 9.4, 9.19 and 9.20 and the agreements of Lenders set forth in
subsections 8.2C, 8.4, 9.5, 9.19 and 9.20 shall survive the payment of the
Loans, 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 9.1B).
9.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
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 Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
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9.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Agent nor any Lender shall be under any obligation to
marshal any assets in favor of Company or any other party or against or in
payment of any or all of the Obligations. To the extent that Company makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Administrative Agent or Lenders enforce
any security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.
9.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or
the Notes 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.
9.13 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 Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute
Lenders, or Lenders and Company, as a partnership, an association, a Joint
Venture or any other kind of entity. The amounts payable at any time hereunder
to each Lender shall be a separate and independent debt, and each Lender shall
be entitled to protect and enforce its rights arising out of this Agreement and
it shall not be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.
To the extent permitted by law, each Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with or as a result
of this Agreement, any other Loan Document, any transaction contemplated by the
Loan Documents, any Loan or the use of proceeds thereof.
9.14 RELEASE OF SECURITY INTEREST .
Upon the proposed sale or other disposition of any Collateral
that is permitted by this Agreement and the Intercreditor Agreement or, subject
to the Intercreditor Agreement, to which Requisite Lenders have otherwise
consented, for which a Loan Party desires to obtain a security interest release
from Collateral Agent, such Loan Party shall deliver to Administrative Agent and
Collateral Agent an Officer's Certificate (i) stating that the Collateral
subject to such
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disposition is being sold or otherwise disposed of in compliance with the terms
hereof and of the Loan Documents and (ii) specifying the Collateral being sold
or otherwise disposed of in the proposed transaction. Upon the receipt of such
Officer's Certificate, Collateral Agent shall, at such Loan 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 constitutes an Asset Sale, shall have
received evidence satisfactory to it that arrangements satisfactory to it have
been made for delivery of the Net Asset Sale Proceeds if and as required by
subsection 2.4, execute and deliver such releases of its security interest in
such Collateral, as may be reasonably requested by such Loan Party. In the event
of any conflict or inconsistency between this subsection 9.14 and the terms of
the Intercreditor Agreement, the terms of the Intercreditor Agreement shall
prevail.
9.15 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.
9.16 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.
9.17 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.
9.18 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 LOAN 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
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(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 9.8;
(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 9.18
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.
9.19 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 LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN 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
9.19 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS,
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RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
9.20 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 Loans or any participations
therein, or (ii) any direct or indirect contractual counterparties in swap
agreements or such contractual counterparties' professional advisors provided
that such assignee, transferee, participant, contractual counterparty or
professional advisor agrees to keep such information confidential to the same
extent required of Lenders hereunder, (c) disclosures to any court or tribunal
(whether or not pursuant to subpoena) in connection with any action arising out
of or related to this Agreement, or (d) disclosures required or requested by any
Government Authority or representative thereof or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court order,
each Lender shall notify Company of any request by any Government Authority or
representative thereof (other than any such request in connection with any
examination of such Lender by such Government Authority) for disclosure of any
such non-public information prior to disclosure of such information; and
provided, further that in no event shall any Lender be obligated or required to
return any materials furnished by Company or any of its Subsidiaries.
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.
9.21 RELEASE OF PARTIES; WAIVERS.
A. Each Borrower, on behalf of itself and each of its
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 or depository and
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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 or depository 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 Loan 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 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.
9.22 NO FIDUCIARY DUTY.
No Agent nor any Lender has or shall have, by reason of this
Agreement or any of the Loan Documents, a fiduciary relationship in respect of,
or a fiduciary duty to, any Borrower, Borrowers, any other Loan Party or Loan
Parties, and the relationship between Administrative Agent and Lenders, on one
hand, and each Borrower, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor.
9.23 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
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Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.
9.24 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
Administrative Agent, and Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
[Remainder of page intentionally left blank]
BORROWERS:
COVANTA POWER INTERNATIONAL
HOLDINGS, INC., as a Borrower
By: _______________________________________
Name: Xxxxxx X. Xxxxxx
Title: Authorized Officer
Notice Address for Borrower:
c/o Covanta Energy Corporation
00 Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
COVANTA POWER DEVELOPMENT, INC.
COVANTA POWER DEVELOPMENT OF
BOLIVIA, INC.
COVANTA WASTE TO ENERGY OF ITALY, INC.
OPI QUEZON, INC., as Borrowers
By: _______________________________________
Name: Xxxxxxx Xxxxxxx
Title: Authorized Officer
Notice Address for Borrower:
c/o Covanta Energy Corporation
00 Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
DEUTSCHE BANK AG, NEW YORK BRANCH
By: DB Service New Jersey, Inc.
as Administrative Agent and Lender
By: _______________________________________
Name:
Title:
By: _______________________________________
Name:
Title:
Notice Address:
Attention: Xxxx Xxxxxx
Deutsche Bank AG, New York Branch
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
