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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 7)*
Danielson Holding Corporation
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(Name of Issuer)
Common Stock, Par Value $0.10 per share
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(Title of Class of Securities)
236274106
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(CUSIP Number)
Marc D. Hauser
Equity Group Investments, L.L.C.
2 North Riverside Plaza, Suite 600
Chicago, Illinois 60606
312-466-3281
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 3, 2005
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(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [_].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
POTENTIAL PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED
IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY
VALID OMB CONTROL NUMBER.
CUSIP No. 236274106 13D/A Page 2 of 12
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1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
SZ Investments, L.L.C. FEIN 36-4150443
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2. Check the Appropriate Box If a Member of a Group (See Instructions)
(a) [X]
(b) [_]
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3. SEC Use Only
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4. Source of Funds (See Instructions)
WC
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5. Check If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
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6. Citizenship or Place of Organization
Delaware
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7. Sole Voting Power
NUMBER OF 0
SHARES _________________________________________________________________
BENEFICIALLY 8. Shared Voting Power
OWNED BY 10,031,736
EACH _________________________________________________________________
REPORTING 9. Sole Dispositive Power
PERSON 0
WITH _________________________________________________________________
10. Shared Dispositive Power
10,031,736
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
10,031,736
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12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [_]
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13. Percent of Class Represented by Amount in Row (11)
13.8% (1)
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14. Type of Reporting Person (See Instructions)
00
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(1) Calculated based on 72,816,011 shares of Common Stock outstanding as of
November 1, 2004, based upon information contained in the Form 10-Q filed by the
Issuer with respect to the quarterly period ended September 30, 2004.
CUSIP No. 236274106 13D/A Page 3 of 12
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1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
EGI-Fund (05-07) Investors, L.L.C. FEIN 20-2062590
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2. Check the Appropriate Box If a Member of a Group (See Instructions)
(a) [X]
(b) [_]
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3. SEC Use Only
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4. Source of Funds (See Instructions)
WC
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5. Check If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
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6. Citizenship or Place of Organization
Delaware
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7. Sole Voting Power
NUMBER OF 0
SHARES _________________________________________________________________
BENEFICIALLY 8. Shared Voting Power
OWNED BY 1,764,706
EACH _________________________________________________________________
REPORTING 9. Sole Dispositive Power
PERSON 0
WITH _________________________________________________________________
10. Shared Dispositive Power
1,764,706
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
1,764,706
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12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [_]
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13. Percent of Class Represented by Amount in Row (11)
2.4% (1)
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14. Type of Reporting Person (See Instructions)
00
--------------------------------------------------------------------------------
(1) Calculated based on 72,816,011 shares of Common Stock outstanding as of
November 1, 2004, based upon information contained in the Form 10-Q filed by the
Issuer with respect to the quarterly period ended September 30, 2004.
CUSIP No. 236274106 13D/A Page 4 of 12
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1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Equity Group Investments, L.L.C. FEIN 36-4195324
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2. Check the Appropriate Box If a Member of a Group (See Instructions)
(a) [X]
(b) [_]
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3. SEC Use Only
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4. Source of Funds (See Instructions)
WC
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5. Check If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
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6. Citizenship or Place of Organization
Delaware
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7. Sole Voting Power
NUMBER OF 0
SHARES _________________________________________________________________
BENEFICIALLY 8. Shared Voting Power
OWNED BY 155,000
EACH _________________________________________________________________
REPORTING 9. Sole Dispositive Power
PERSON 0
WITH _________________________________________________________________
10. Shared Dispositive Power
155,000
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
155,000
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12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [_]
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13. Percent of Class Represented by Amount in Row (11)
0.2% (1)
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14. Type of Reporting Person (See Instructions)
00
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(1) Calculated based on 72,816,011 shares of Common Stock outstanding as of
November 1, 2004, based upon information contained in the Form 10-Q filed by the
Issuer with respect to the quarterly period ended September 30, 2004.
CUSIP No. 236274106 13D/A Page 5 of 12
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1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Chai Trust Company, L.L.C. FEIN 36-6934216
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2. Check the Appropriate Box If a Member of a Group (See Instructions)
(a) [X]
(b) [_]
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3. SEC Use Only
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4. Source of Funds (See Instructions)
WC
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5. Check If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
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6. Citizenship or Place of Organization
Illinois
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7. Sole Voting Power
NUMBER OF 0
SHARES _________________________________________________________________
BENEFICIALLY 8. Shared Voting Power
OWNED BY 11,951,442
EACH _________________________________________________________________
REPORTING 9. Sole Dispositive Power
PERSON 0
WITH _________________________________________________________________
10. Shared Dispositive Power
11,951,442
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,951,442
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12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [_]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
16.4% (1)
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14. Type of Reporting Person (See Instructions)
00
--------------------------------------------------------------------------------
(1) Calculated based on 72,816,011 shares of Common Stock outstanding as of
November 1, 2004, based upon information contained in the Form 10-Q filed by the
Issuer with respect to the quarterly period ended September 30, 2004.
CUSIP No. 236274106 13D/A Page 6 of 12
This Amendment No. 7 to Schedule 13D relates to the common stock, par value
$0.10 per share ("Common Stock"), of Danielson Holding Corporation, a Delaware
corporation (the "Issuer"). Items 2, 3, 4, 5, 6 and 7 of the Schedule 13D are
hereby amended to read in their entirety as follows:
ITEM 2. Identity and Background
(a-c) and (f) This Statement is being filed by SZ Investments, L.L.C., a
Delaware limited liability company ("SZI"), EGI-Fund (05-07) Investors, L.L.C.,
a Delaware limited liability company ("Fund 05-07"), Equity Group Investments,
L.L.C., a Delaware limited liability company ("EGI"), and Chai Trust Company,
L.L.C., an Illinois limited liability company ("Chai Trust"; together with SZI,
Fund 05-07 and EGI, the "Reporting Persons").
The managing member of Fund 05-07 is SZI. The managing member of SZI is Zell
General Partnership, Inc., an Illinois corporation ("ZGP"). The managing member
of EGI is Alpha/ZFT Partnership, an Illinois general partnership ("Alpha/ZFT").
Each of SZI, ZGP and Alpha/ZFT are directly or indirectly owned by various
trusts for the benefit of Samuel Zell and his family. The trustee of each of
these trusts is Chai Trust.
The executive officers and directors of SZI, Fund 05-07 and EGI are as follows:
-Samuel Zell - President of SZI and Fund 05-07; Chairman of the Board of EGI
-Donald J. Liebentritt - Vice President of SZI and Fund 05-07; President of EGI
-William C. Pate - Vice President of SZI and Fund 05-07; Managing Director of
EGI
-Philip G. Tinkler - Treasurer of SZI and Fund 05-07; Chief Financial Officer of
EGI
The officers and directors of Chai Trust are as follows:
-Bert Cohen is a Director of Chai Trust. Mr. Cohen is also a semi-retired
investor, whose residence is 5000-4A Estate Enighed, #65, St. John, VI 00830.
-Kellie Zell is a Director of Chai Trust and also works as a homemaker.
-Donald J. Liebentritt is the President and a Director of Chai Trust.
-Leah Zell Wanger is a Director of Chai Trust. Ms. Wagner is a private investor
whose business address is 227 West Monroe Street, Chicago, Illinois 60603.
-JoAnn Zell Gillis is a Director of Chai Trust. Mrs. Zell Gillis is a physician.
-Matthew Zell is a Director of Chai Trust. Mr. Zell is a Manager of EGI.
-Robert M. Levin is a Senior Trust Officer of Chai Trust. Mr. Levin is also a
partner in the law firm Levin & Schreder Ltd., whose business address is 120
North LaSalle Street, Suite 3800, Chicago, Illinois 60602.
-James Bunegar is Vice President, Chief Financial Officer, Assistant Trust
Officer and Treasurer of Chai Trust. Mr. Bunegar is also the Vice President -
Taxes of EGI.
The principal business of the Reporting Persons, ZGP and Alpha/ZFT is general
investments.
The business address of each of the Reporting Persons, ZGP, Alpha/ZFT, William
Pate, Philip Tinkler, Kellie Zell, Donald Liebentritt, JoAnn Zell Gillis,
Matthew Zell and James Bunegar is Two North Riverside Plaza, Chicago, Illinois
60606.
All of the executive officers and directors of each Reporting Person, ZGP,
Alpha/ZFT are United States citizens.
(d) and (e) No Reporting Person nor, to the best knowledge of such Reporting
Persons, any of the other persons listed in Item 2 hereto, has during the last
five years (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was, or is, subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
CUSIP No. 236274106 13D/A Page 7 of 12
ITEM 3. Source and Amount of Funds or Other Consideration
Initial Investment
On August 12, 1999 (the "Closing Date"), pursuant to the Stock Purchase and Sale
Agreement described in Item 4 below, SZI acquired from the Issuer: (i) 2,000,000
newly issued shares of Common Stock (the "Initial Shares") and (ii) a warrant to
purchase an additional 2,000,000 shares of Common Stock (the "Warrant"). The
aggregate amount of funds used in acquiring the Initial Shares and the Warrant
was $9,000,000. All funds used in acquiring the Initial Shares and the Warrant
were obtained from the working capital of SZI.
In connection with the Issuer's acquisition of American Commercial Lines LLC
("ACL") and the recapitalization of ACL, the Issuer announced that it would
conduct a rights offering to be issued pro rata to all holders of the Issuer's
Common Stock to purchase newly-issued shares of Common Stock in the aggregate
amount of $42 million ("ACL Rights Offering"). SZI agreed with the Issuer
pursuant to a binding Term Sheet ("Term Sheet") to exercise the Warrant and
purchase up to 4.0 million shares of Common Stock offered in the ACL Rights
Offering which were not otherwise subscribed for. On May 29, 2002, the Issuer
closed the ACL Rights Offering. In accordance with the terms of the ACL Rights
Offering, SZI purchased 1,560,174 shares of Common Stock at a purchase price of
$5.00 per share (the "ACL Rights Offering Shares"), and, pursuant to its
obligations under the Term Sheet, exercised its outstanding Warrant to purchase
1,900,437 shares of Common Stock at a purchase price of $4.74 per share (the
"Warrant Shares"). All funds used to purchase the ACL Rights Offering Shares and
the Warrant Shares came from the working capital of SZI.
Covanta Investment
On December 2, 2003, the Issuer entered into a Note Purchase Agreement (the
"Note Purchase Agreement") among the Issuer, SZI, D.E. Shaw Laminar Portfolios,
L.L.C. ("Laminar") and Third Avenue Value Fund Series ("Third Avenue"), pursuant
to which each of SZI, Laminar and Third Avenue, severally and not jointly,
provided the Issuer with a bridge loan in the aggregate principal amount of
$40,000,000 (the "Bridge Loan") and the Issuer issued (i) shares of its Common
Stock to each of SZI, Laminar and Third Avenue, which represented consideration
for SZI, Laminar and Third Avenue having provided the Bridge Loan, of which
1,280,213 shares were issued to SZI (SZI's shares referred to as the "Fee
Shares"), and (ii) convertible notes, which were convertible into Common Stock
in the event that sufficient shares were not purchased in the Covanta Rights
Offering (defined in Item 4 below), in an aggregate principal amount of
$40,000,000 to SZI, Laminar and Third Avenue, including $10,000,000 to SZI
(SZI's notes referred to as the "Note") and were issued in consideration for the
Bridge Loan. The Issuer used the proceeds of the Bridge Loan to purchase the
equity of Covanta Energy Corporation ("Covanta") pursuant to a reorganization
plan under Chapter 11 proceedings in the United States Bankruptcy Court for the
Southern District of New York (the "Bankruptcy Court"). The investment by SZI
described in this paragraph is referred to as the "Covanta Investment." The
Issuer repaid the Bridge Loan in full on June 11, 2004. A portion of such
repayment funds were used to acquire an additional 5,055,618 shares of Common
Stock at a price of $1.53 per share in connection with the Covanta Rights
Offering (defined below). All funds used in making SZI's portion of the Bridge
Loan were obtained from the working capital of SZI.
Contribution to Fund 05-07
On January 24, 2005, SZI, a member of Fund 05-07, contributed 1,764,706 shares
of Common Stock to Fund 05-07.
CUSIP No. 236274106 13D/A Page 8 of 12
American Ref-Fuel Investment
On February 1, 2005, the Issuer publicly announced its intent to acquire all of
the outstanding capital stock of American Ref-Fuel Holdings Corp. and refinance
certain existing indebtedness of Covanta (the "Acquisition"). In connection
therewith, the Issuer announced its intent to issue pro rata to all holders of
the Issuer's Common Stock rights to purchase newly-issued shares of Common Stock
in the aggregate amount of approximately $400 million (the "ARF Rights
Offering"). On January 31, 2005, SZI and Fund 05-07 entered into Equity
Commitment for Rights Offering agreements (the "Equity Commitment") with the
Issuer pursuant to which each of SZI and Fund 05-07 agreed to exercise in full
all of the basic subscription rights issued to it in the Rights Offering and pay
for and acquire the applicable Common Stock, subject to certain conditions
precedent set forth therein (together, the "Equity Commitment Agreements").
Copies of the Equity Commitment Agreements are attached hereto as Exhibit 10 and
incorporated herein by reference thereto. Simultaneous therewith, each of
Laminar and Third Avenue entered into similar Equity Commitment for Rights
Offering agreements with the Issuer making commitments to the Issuer similar to
the Equity Commitment. In consideration for the making of the Equity Commitment,
the Issuer agreed to pay to SZI and Fund 05-07 an amount equal to between 1.5%
and 2.25% (depending on the date of the commencement of the ARF Rights Offering,
as more fully described in the Equity Commitment Agreements) of its respective
Equity Commitment. SZI and Fund 05-07 will be granted certain registration
rights with respect to shares of Common Stock of the Issuer held by them, which
rights are more fully described in the Equity Commitment Agreements and will be
memorialized in a registration rights agreement. All funds to be used in making
SZI's and Fund 05-07's portion of the Equity Commitment will be obtained from
the respective working capital of SZI and Fund 05-07.
ITEM 4. Purpose of the Transaction
Initial Investment
The acquisition of the Initial Shares and the Warrant was effected for the
purpose of investing in the Issuer and to provide funds with which the Issuer
may from time to time fund business acquisitions.
The Issuer entered into a Stock Purchase and Sale Agreement dated as of April
14, 1999 (the "Stock Purchase Agreement") with Samstock, L.L.C., a wholly-owned
subsidiary of SZI ("Samstock"). The Stock Purchase Agreement was amended by
Amendment No. 1, Assignment and Consent to Assignment of Stock Purchase
Agreement, dated May 7, 1999 by and among Samstock, the Issuer and SZI (the
"Amendment") pursuant to which the rights and obligations of Samstock under the
Purchase Agreement were assigned to and assumed by SZI. On the Closing Date, SZI
acquired the Initial Shares and the Warrant pursuant to the Stock Purchase
Agreement, as amended.
In connection with the acquisition of the Initial Shares and the Warrant, the
Issuer granted to SZI certain registration rights, which rights are now
memorialized in a Registration Rights Agreement dated as of November 8, 2002 and
made by and between the Issuer and SZI (the "Registration Rights Agreement").
Pursuant to the terms of the Registration Rights Agreement, SZI (or its
designee) may make up to two requests that the Issuer file a shelf registration
statement covering the resale of the Common Stock held from time to time by SZI,
subject to certain limitations. In addition, SZI has piggyback registration
rights in connection with a public offering of Common Stock by the Issuer solely
for cash.
The purpose of the transactions contemplated under the Term Sheet was to assist
the Issuer in satisfying its cash contribution obligations in connection with
the acquisition and recapitalization of ACL. On May 29, 2002, the Issuer closed
the ACL Rights Offering. Pursuant to its obligations under the Term Sheet and in
accordance with the terms of the ACL Rights Offering, SZI purchased 1,560,174
shares of Common Stock under the ACL Rights Offering and exercised its
outstanding Warrant to purchase 1,900,437 shares of Common Stock.
Covanta Investment
The acquisition of the Fee Shares and the Notes were effected for the purpose of
investing in the Issuer and to provide funds with which the Issuer used to
purchase Covanta.
CUSIP No. 236274106 13D/A Page 9 of 12
Following the Bankruptcy Court's approval of the plan of reorganization and
after closing of the acquisition of Covanta, the Issuer subsequently initiated a
pro rata rights offering to all stockholders (the "Covanta Rights Offering").
During the Covanta Rights Offering, each of Laminar, SZI and Third Avenue
acquired additional shares of the Issuer's Common Stock pursuant to the Note
Purchase Agreement. The Issuer used the proceeds of the Covanta Rights Offering
to repay the convertible notes and for general working capital purposes. In
connection with the Covanta Rights Offering and pursuant to the Note Purchase
Agreement, SZI acquired an additional 5,055,618 shares of Common Stock at a
price of $1.53 per share, for total consideration of $7,735,095,54.
In connection with the Note Purchase Agreement, the Issuer granted SZI, Laminar
and Third Avenue certain registration rights, which rights are memorialized in a
Registration Rights Agreement dated as of December 2, 2003 and made by and among
the Issuer, SZI, Laminar and Third Avenue. The Issuer filed a shelf registration
statement on Form S-3 which was declared effective on August 24, 2004,
registering the sale of 17,711,491 shares of Common Stock, including 2,240,372
shares beneficially owned by SZI.
EGI Option
On December 11, 2001, the Issuer issued to EGI a Stock Option Agreement as
consideration for certain services performed for the benefit of Issuer by EGI
(the "EGI Option"). Pursuant to the terms of the EGI Option, EGI holds the right
to purchase 155,000 shares of Common Stock at a price of $3.37 per share of
Common Stock. The right to purchase, which is fully vested and currently
exercisable in full, expires on December 11, 2011.
Contribution to Fund 05-07
On January 24, 2005, SZI, a member of Fund 05-07, contributed 1,764,706 shares
of Common Stock to Fund 05-07.
American Ref-Fuel Investment
The entering into of the Equity Commitment Agreements and the making of the
Equity Commitments thereunder by SZI and Fund 05-07 were effected for the
purpose of investing in the Issuer and to provide funds with which the Issuer
has agreed to fund the Acquisition.
Pursuant to the ARF Rights Offering, the Issuer will issue pro rata to all
holders of the Issuer's Common Stock rights to purchase newly-issued shares of
Common Stock in the aggregate amount of approximately $400 million. In
accordance with the terms of the Equity Commitment Agreements, subject to the
satisfaction of certain conditions precedent set forth therein, SZI and Fund
05-07 have each agreed to exercise in full all of the basic subscription rights
issued to it in the Rights Offering and pay for and acquire the applicable
Common Stock.
In consideration for the making of the Equity Commitment, the Issuer agreed to
pay to SZI and Fund 05-07 an amount equal to between 1.5% and 2.25% (depending
on the date of the commencement of the ARF Rights Offering, as more fully
described in the Equity Commitment Agreements) of its Equity Commitment. SZI and
Fund 05-07 will be granted certain registration rights with respect to shares of
Common Stock of the Issuer held by them, which rights are more fully described
in the Equity Commitment Agreement and will be memorialized in a registration
rights agreement.
The summaries contained in this Schedule 13D of certain provisions of each of
the Stock Purchase Agreement, Amendment, Term Sheet, Registration Rights
Agreement, the Note Purchase Agreement, the Covanta Registration Rights
Agreement and the Equity Commitment Agreements are not intended to be complete
and are qualified in their entirety by reference to each respective agreement
attached as Exhibits to Schedule 13D and incorporated herein by reference.
CUSIP No. 236274106 13D/A Page 10 of 12
Like all holders of 5% or more of Issuer's Common Stock, SZI, Fund 05-07 and EGI
will be subject to restrictions contained in Issuer's Certificate of
Incorporation, which limits stock transfers by 5% or greater shareholders and
prohibits parties from acquiring 5% or more of Issuer's Common Stock without the
Issuer's consent. Subject to the restrictions contained in Issuer's Certificate
of Incorporation, each of SZI, Fund 05-07 and EGI intends to continue to review
its investment in the Common Stock and, from time to time depending upon certain
factors, including without limitation the financial performance of the Issuer,
the availability and price of shares of Common Stock and other general market
and investment conditions, may determine to acquire through open market
purchases or otherwise additional shares of Common Stock, or may determine to
sell through the open market or otherwise, in each case, subject to the
limitations of the Stock Purchase Agreement, as amended.
Except as stated above, none of the Reporting Persons nor, to the best knowledge
of any Reporting Person, ZGP, Alpha/ZFT or any of the persons listed in Item 2
hereto, has any plans or proposals of the types referred to in clauses (a)
through (j) of Item 4 of Schedule 13D, as promulgated by the Securities and
Exchange Commission.
ITEM 5. Interest in Securities of the Issuer
(a) and (b) To the best knowledge of the Reporting Persons, based upon
information provided to the Reporting Persons by the Issuer, there were
72,816,011 shares of Common Stock outstanding as of November 1, 2004, based upon
information contained in the Form 10-Q filed by the Issuer with respect to the
quarterly period ended September 30, 2004. Based upon the foregoing, (i) the
10,031,736 shares of Common Stock beneficially owned by SZI represent
approximately 13.8% of the issued and outstanding Common Stock; (ii) the
1,764,706 shares of Common Stock beneficially owned by Fund 05-07 represent
approximately 2.4% of the issued and outstanding Common Stock; (iii) the 155,000
shares of Common Stock beneficially owned by EGI represent approximately 0.2% of
the issued and outstanding Common Stock; and (iv) the 11,951,442 shares of
Common Stock beneficially owned by Chai Trust represent approximately 16.4% of
the issued and outstanding Common Stock.
SZI, Fund 05-07 and EGI each currently shares the power to vote or to direct the
vote of all shares of Issuer's Common Stock owned by it with Chai Trust.
SZI disclaims beneficial ownership of any securities of Issuer beneficially
owned by Laminar or Third Avenue.
Except as set forth below, as of the date hereof, no Reporting Person, nor to
the best knowledge of any Reporting Person, any of the persons set forth in Item
2 hereof, owns any shares of Common Stock other than the shares owned by the
Reporting Persons. Donald Liebentritt owns 100,000 shares of Common Stock, with
respect to which Mr. Liebentritt has sole power to vote and to dispose of such
shares. William Pate owns 163,142 shares of Common Stock (including 1,500 shares
of restricted stock granted as Director's compensation), and options to purchase
13,334 shares of Common Stock, with respect to each of which Mr. Pate has sole
power to vote and dispose of such shares. Philip Tinkler owns 25,604 shares of
Common Stock, with respect to which Mr. Tinkler has sole power to vote and
dispose of such shares. Samuel Zell owns no shares of Common Stock directly, but
may be deemed to have shared indirect beneficial ownership of an aggregate
amount of 11,964,518 shares of Common Stock with Chai and Helen Zell Revocable
Trust, an Illinois trust, with respect to each of which Mr. Zell may be deemed
to have shared indirect power to vote and to dispose of such shares.
(c) Except as set forth above, during the last 60 days, no transactions in the
Common Stock were effected by any Reporting Person, or to the best knowledge of
any Reporting Person, any of the persons set forth in Item 2.
(d) No person other than EGI, SZI and Fund 05-07 has the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of
shares of Common Stock owned by EGI, SZI and Fund 05-07, respectively.
(e) Not applicable.
ITEM 6. Contracts, Arrangements, Understandings or Relationships with respect to
Securities of the Issuer
Except for the matters described herein, no Reporting Person nor, to the best
knowledge of any Reporting Person, any of the other persons listed in Item 2
hereto has any contract, arrangement, understanding or relationship with any
person with respect to any securities of the Issuer.
CUSIP No. 236274106 13D/A Page 11 of 12
ITEM 7. Material to be Filed as Exhibits.
Exhibit 1 Stock Purchase and Sale Agreement (incorporated
by reference to Exhibit 10.1 of Danielson Holding
Corporation's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1999, filed with the
Securities and Exchange Commission on
August 13, 1999)
Exhibit 2 Amendment No. 1, Assignment and Consent to
Assignment of Stock Purchase Agreement
(incorporated by reference to Exhibit 10.2 of
Danielson Holding Corporation's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1999,
filed with the Securities and Exchange Commission
on August 13, 1999)
Exhibit 3 Warrant*
Exhibit 4 Summary of Terms of Standby Commitment of Rights
Offering between Danielson Holding Corporation and
SZ Investments, L.L.C., dated as of March 21,
2002**
Exhibit 5 Intentionally omitted
Exhibit 6 Amended and Restated Summary of Terms of Standby
Commitment of Rights Offering between Danielson
Holding Corporation and SZ Investments, L.L.C., dated
as of April 17, 2002***
Exhibit 7 Registration Rights Agreement between Danielson
Holding Corporation and SZ Investments, L.L.C., dated
as of November 8, 2002****
Exhibit 8 Note Purchase Agreement among Danielson Holding
Corporation, SZ Investments, L.L.C., D.E. Shaw
Laminar Portfolios, L.L.C. and Third Avenue
Value Fund Series, dated as of December 2, 2003*****
Exhibit 9 Registration Rights Agreement among Danielson Holding
Corporation, SZ Investments, L.L.C., D.E. Shaw
Laminar Portfolios, L.L.C. and Third Avenue
Value Fund Series, dated as of December 2, 2003*****
Exhibit 10 Equity Commitment for Rights Offering between
Danielson Holding Corporation and SZ Investments,
L.L.C. dated as of January 31, 2005
and
Equity Commitment for Rights Offering between
Danielson Holding Corporation and EGI-Fund (05-07)
Investors, L.L.C. dated as of January 31, 2005
----------
* Filed on August 12, 1999 on Schedule 13D
** Filed on March 21, 2002 and April 1, 2002 on Schedule 13D/A (Amendment No. 1)
*** Filed on May 29, 2002 on Schedule 13D/A (Amendment No. 2)
**** Filed on November 8, 2002 on Schedule 13D/A (Amendment No. 3)
***** Filed on December 5, 2003 on Schedule 13D/A (Amendment No. 4)
CUSIP No. 236274106 13D/A Page 12 of 12
SIGNATURE
After reasonable inquiry and to the best of the undersigned's knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
DATED: February 3, 2005
SZ INVESTMENTS, L.L.C.
EGI-FUND (05-07) INVESTORS, L.L.C.
Each by: /s/ DONALD J. LIEBENTRITT
-------------------------------------
Name: Donald J. Liebentritt
Title: Vice President
CHAI TRUST COMPANY, L.L.C.
EQUITY GROUP INVESTMENTS, L.L.C.
Each by: /s/ DONALD J. LIEBENTRITT
-------------------------------------
Name: Donald J. Liebentritt
Title: President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of the filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement: provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name and any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL
CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
CUSIP No. 236274106 13D/A
EXHIBIT INDEX
Exhibit 1 Stock Purchase and Sale Agreement (incorporated
by reference to Exhibit 10.1 of Danielson Holding
Corporation's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1999, filed with the
Securities and Exchange Commission on
August 13, 1999)
Exhibit 2 Amendment No. 1, Assignment and Consent to
Assignment of Stock Purchase Agreement
(incorporated by reference to Exhibit 10.2 of
Danielson Holding Corporation's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1999,
filed with the Securities and Exchange Commission
on August 13, 1999)
Exhibit 3 Warrant*
Exhibit 4 Summary of Terms of Standby Commitment of Rights
Offering between Danielson Holding Corporation and
SZ Investments, L.L.C., dated as of March 21,
2002**
Exhibit 5 Intentionally omitted
Exhibit 6 Amended and Restated Summary of Terms of Standby
Commitment of Rights Offering between Danielson
Holding Corporation and SZ Investments, L.L.C., dated
as of April 17, 2002***
Exhibit 7 Registration Rights Agreement between Danielson
Holding Corporation and SZ Investments, L.L.C., dated
as of November 8, 2002****
Exhibit 8 Note Purchase Agreement among Danielson Holding
Corporation, SZ Investments, L.L.C., D.E. Shaw
Laminar Portfolios, L.L.C. and Third Avenue
Value Fund Series, dated as of December 2, 2003*****
Exhibit 9 Registration Rights Agreement among Danielson Holding
Corporation, SZ Investments, L.L.C., D.E. Shaw
Laminar Portfolios, L.L.C. and Third Avenue
Value Fund Series, dated as of December 2, 2003*****
Exhibit 10 Equity Commitment for Rights Offering between
Danielson Holding Corporation and SZ Investments,
L.L.C. dated as of January 31, 2005
and
Equity Commitment for Rights Offering between
Danielson Holding Corporation and EGI-Fund (05-07)
Investors, L.L.C. dated as of January 31, 2005
CUSIP No. 236274106 13D/A
EXHIBIT 10
EQUITY COMMITMENT
FOR RIGHTS OFFERING
DANIELSON HOLDING CORPORATION
Parties
Danielson Holding Corporation, a Delaware corporation ("DHC"), and EGI-Fund
(05-07) Investors, L.L.C., a Delaware limited liability company (the
"Shareholder").
Acquisition
DHC expects to acquire (the "Acquisition") all of the capital stock of American
Ref-Fuel Holdings Corp. ("Ref-Fuel"), as well as refinance certain existing
indebtedness of Covanta Energy Corporation ("Covanta"), a wholly-owned
subsidiary of DHC.
Use of Proceeds
To fund the Acquisition, refinance certain indebtedness of Ref-Fuel, Covanta and
their subsidiaries, pay transaction fees and expenses, and for general corporate
purposes.
Rights Offering
In connection with the Acquisition, DHC expects to conduct a rights offering
("Rights Offering") of warrants or other rights (the "Rights") to purchase an
aggregate of approximately $400 million of newly-issued shares of DHC common
stock, par value $0.10 per share ("Common Stock").
The purchase price for the Common Stock in the Rights Offering will be not
greater than $6.00 per share ("Subscription Price"), and the total number of
Common Stock shares to be offered will be approximately 67 million.
The Rights shall be issued to each stockholder (including, without limitation,
to the Shareholder) on a pro rata basis ("basic subscription right") and shall
be non-transferable. Stockholders, including, without limitation, the
Shareholder, who fully exercise their basic subscription right shall also be
entitled, but shall not be obliged, to subscribe for any Common Stock shares
offered in the Rights Offering and not purchased by other stockholders, subject
to proration (in proportion to the number of Common Stock shares a stockholder
has subscribed for pursuant to the basic subscription right) if the
oversubscribed shares exceed the number of Common Stock shares available
("oversubscription right"). Exercise of the basic subscription right (including
by the Shareholder pursuant to the Equity Commitment hereunder) and the
oversubscription right shall be subject, in each instance, to the restrictions
contained in Article Fifth of DHC's Certificate of Incorporation and such other
transfer restrictions and/or stock certificate escrow protection mechanisms as
may be imposed by DHC in accordance with past practice to ensure compliance with
Article Fifth.
Equity Commitment of Shareholder
Provided that the condition precedents specified under the heading "Conditions
to the Obligations of the Shareholder" below have been satisfied, or waived by
the Shareholder in writing, then the Shareholder agrees to exercise in full (the
"Equity Commitment") all of its basic subscription rights issued to the
Shareholder in the Rights Offering and pay for and acquire the applicable Common
Stock. Issuance of any Common Stock pursuant to any exercise of the Equity
Commitment shall be subject in each instance, to the restrictions contained in
Article Fifth of DHC's Certificate of Incorporation and such other transfer
restrictions and/or stock certificate escrow protection mechanisms as may be
imposed by DHC in accordance with past practice to ensure compliance with
Article Fifth. Further, the Shareholder agrees that it will not sell, pledge or
otherwise transfer any shares of Common Stock prior to the closing of the Rights
Offering or the termination of its commitment hereunder. The Shareholder's
decision to participate in the Rights Offering contemplated hereby is an
independent decision based upon its own independent analysis and is not based
upon the investment decision of any other person or entity.
Amount Payable to the Shareholder
In consideration of the Shareholder's Equity Commitment:
- Upon DHC and the Shareholder signing this "Equity Commitment for Rights
Offering," the Shareholder shall earn an amount equal to 1.5% of its Equity
Commitment to provide its Equity Commitment through 5/31/05; - On or prior to
5/15/05, for an additional earned amount of .25% of the Shareholder's Equity
Commitment, DHC shall have the option to extend the Shareholder's obligations
hereunder through 6/30/05; - On or prior to 6/15/05, for an additional earned
amount of .25% of the Shareholder's Equity Commitment, DHC shall have the option
to extend the Shareholder's obligations hereunder through 7/31/05; - On or prior
to 7/15/05, for an additional earned amount of .25% of the Shareholder's Equity
Commitment, DHC shall have the option to extend the Shareholder's obligations
hereunder through 8/31/05.
In the event the Rights Offering is not commenced before August 15, 2005 or is
terminated, DHC will be entitled, at its option, to pay any amount earned by the
Shareholder by delivering to the Shareholder a number of shares of Common Stock,
valued based on the 10-day average closing price on the American Stock Exchange
of the Common Stock following failure to commence the Rights Offering by August
15, 2005 or the announcement of the termination of the Rights Offering;
provided, however, that such delivery of shares of Common Stock shall only be
made to the extent it would not result in an unreasonable risk of an ownership
change within the meaning of Section 382 of the Internal Revenue Code. For the
avoidance of doubt, in the event that delivery of such shares would result in an
unreasonable risk of an ownership change within the meaning of Section 382 of
the Internal Revenue Code, DHC shall pay the amounts earned by the Shareholder
in cash. Amounts earned by the Shareholder shall be payable and paid within five
(5) business days of the earliest of (i) the failure to commence the Rights
Offering by August 15, 2005, (ii) final termination of the Rights Offering and
(iii) the closing of the Rights Offering.
In addition, DHC shall reimburse the Shareholder for all reasonable
out-of-pocket fees and expenses of outside legal counsel incurred in connection
with the execution and delivery of this agreement.
Registration Rights
The Shareholder will be granted registration rights with respect to all shares
of common stock of DHC held by it, consistent with that certain registration
rights agreement, dated as of December 2, 2003, by and between DHC and D. E.
Shaw Laminar Portfolios, L.L.C., a Delaware limited liability company, SZ
Investments, L.L.C., a Delaware limited liability company, and Third Avenue
Trust, on behalf of The Third Avenue Value Fund Series, a Delaware business
trust, (the "Existing Registration Rights Agreement"), including immediate shelf
registration rights; provided however, that in addition to the immediate shelf
registration rights, the Shareholder shall be granted demand registration rights
with respect to all shares of common stock of DHC held by the Shareholder as
described below, and with respect to any primary underwritten equity offering
initiated by DHC prior to June 30, 2006, the Shareholder (together with any
other shareholders executing an equity commitment similar to the equity
commitment hereunder) and DHC will be subject to a pro rata "cut back" in the
amount of Common Stock to be included therein in the case any primary
underwritten equity offering is scaled back. Whether or not the Rights Offering
is consummated, the Shareholder (together with any other shareholders executing
an equity commitment similar to the equity commitment hereunder) will be
entitled to one secondary underwritten offering under the registration rights
agreement with the participation by DHC in a typical "road show" process which
shall have the full support of DHC and its management, subject to certain
customary limitations (it being understood that if such offering is suspended by
DHC, then such offering shall not count as such underwritten equity offering).
The reasonable fees and expenses (other than underwriting discounts and
commissions) of any such offering will be paid by DHC. Nothing in the
registration rights agreement or otherwise will limit the applicability of the
transfer restrictions contained in DHC's Restated Certificate of Incorporation,
as amended.
DHC and the Shareholder agree to negotiate, execute and deliver an amendment to
the Existing Registration Rights Agreement at or prior to closing of the Rights
Offering, in order to incorporate the terms and conditions described above,
including customary covenants related to an underwritten offering.
Representations and Warranties
DHC makes the representations and warranties set forth on Exhibit A hereto to
the Shareholder. The Shareholder makes to DHC the representations and warranties
set forth on Exhibit B hereto.
Conditions to the Obligations of the Shareholder
The obligations of the Shareholder described herein shall be subject to the
following conditions (which may be waived on behalf of the Shareholder by the
Shareholder in its sole and absolute discretion);
(i) The receipt of all government approvals and consents to consummate the
Acquisition and related transactions as required by law;
(ii) The Rights Offering closing no later than May 31, 2005, as such date may be
extended as provided for herein until August 31, 2005;
(iii) The concurrent consummation of the debt financing (or alternative debt
financing on terms and conditions no less favorable to DHC in the aggregate) on
substantially the same terms and conditions as described in the commitment
letters, as set forth on Exhibit C;
(iv) The representations and warranties set forth on Exhibit A hereto being true
and correct in all material respects as of the date hereof; and
(v) The concurrent consummation of the Acquisition and the Rights Offering.
Termination Rights of the Shareholder
The Shareholder shall have no further obligations hereunder in the event that
the Rights Offering is not closed on or prior to May 31, 2005, as such date may
be extended as provided for herein until August 31, 2005.
DHC's Termination Rights
DHC shall be entitled to terminate its obligations hereunder at any time for any
or no reason by delivery of written notice to the Shareholder; provided,
however, that such termination shall not effect DHC's obligation, if any, to pay
any and all amounts earned by the Shareholder pursuant to this "Equity
Commitment for Rights Offering".
Public Announcements
DHC and the Shareholder shall both agree (such consent not to be reasonably
withheld) as to the content and timing of any press release or other document
disclosing the existence of the Rights Offering, the Equity Commitment, and any
related transactions.
Miscellaneous
This "Equity Commitment for Rights Offering" is made solely for the benefit of
the Shareholder, the affiliates of the Shareholder, and DHC and its affiliates,
and no other person, partnership, association or corporation shall acquire or
have any right under or by virtue of this "Equity Commitment for Rights
Offering".
Neither DHC nor the Shareholder may assign any of its rights (nor delegate any
of its obligations) under this "Equity Commitment for Rights Offering" without
the prior written consent of DHC (if such assignment or delegation is to be made
by the Shareholder) or the Shareholder (if the assignment or delegation is to be
made by DHC).
In case any one or more of the provisions contained in this "Equity Commitment
for Rights Offering," or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect under the laws of any
jurisdiction, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not
be in any way affected or impaired thereby or under the laws of any other
jurisdiction.
This "Equity Commitment for Rights Offering" may not be amended, modified or
changed, in whole or in part, except by an instrument in writing signed by DHC
and the Shareholder.
Binding Commitment
This "Equity Commitment for Rights Offering" made by the Shareholder represents
the binding commitment by, on the one hand, DHC and, on the other hand, the
Shareholder, with respect to the subject matter hereof. Each party executing
this Agreement intends to be legally bound hereby.
Agreed and Acknowledged this 31st day of January, 2005.
DANIELSON HOLDING CORPORATION
By: /s/ ANTHONY J. ORLANDO
-------------------------------------
Title: President and CEO
EGI-FUND (05-07) INVESTORS, L.L.C.
By: /s/ DONALD J. LIEBENTRITT
-------------------------------------
Title: Vice President
EQUITY COMMITMENT
FOR RIGHTS OFFERING
DANIELSON HOLDING CORPORATION
Parties
Danielson Holding Corporation, a Delaware corporation ("DHC"), and SZ
Investments, L.L.C., a Delaware limited liability company (the "Shareholder").
Acquisition
DHC expects to acquire (the "Acquisition") all of the capital stock of American
Ref-Fuel Holdings Corp. ("Ref-Fuel"), as well as refinance certain existing
indebtedness of Covanta Energy Corporation ("Covanta"), a wholly-owned
subsidiary of DHC.
Use of Proceeds
To fund the Acquisition, refinance certain indebtedness of Ref-Fuel, Covanta and
their subsidiaries, pay transaction fees and expenses, and for general corporate
purposes.
Rights Offering
In connection with the Acquisition, DHC expects to conduct a rights offering
("Rights Offering") of warrants or other rights (the "Rights") to purchase an
aggregate of approximately $400 million of newly-issued shares of DHC common
stock, par value $0.10 per share ("Common Stock").
The purchase price for the Common Stock in the Rights Offering will be not
greater than $6.00 per share ("Subscription Price"), and the total number of
Common Stock shares to be offered will be approximately 67 million.
The Rights shall be issued to each stockholder (including, without limitation,
to the Shareholder) on a pro rata basis ("basic subscription right") and shall
be non-transferable. Stockholders, including, without limitation, the
Shareholder, who fully exercise their basic subscription right shall also be
entitled, but shall not be obliged, to subscribe for any Common Stock shares
offered in the Rights Offering and not purchased by other stockholders, subject
to proration (in proportion to the number of Common Stock shares a stockholder
has subscribed for pursuant to the basic subscription right) if the
oversubscribed shares exceed the number of Common Stock shares available
("oversubscription right"). Exercise of the basic subscription right (including
by the Shareholder pursuant to the Equity Commitment hereunder) and the
oversubscription right shall be subject, in each instance, to the restrictions
contained in Article Fifth of DHC's Certificate of Incorporation and such other
transfer restrictions and/or stock certificate escrow protection mechanisms as
may be imposed by DHC in accordance with past practice to ensure compliance with
Article Fifth.
Equity Commitment of Shareholder
Provided that the condition precedents specified under the heading "Conditions
to the Obligations of the Shareholder" below have been satisfied, or waived by
the Shareholder in writing, then the Shareholder agrees to exercise in full (the
"Equity Commitment") all of its basic subscription rights issued to the
Shareholder in the Rights Offering and pay for and acquire the applicable Common
Stock. Issuance of any Common Stock pursuant to any exercise of the Equity
Commitment shall be subject in each instance, to the restrictions contained in
Article Fifth of DHC's Certificate of Incorporation and such other transfer
restrictions and/or stock certificate escrow protection mechanisms as may be
imposed by DHC in accordance with past practice to ensure compliance with
Article Fifth. Further, the Shareholder agrees that it will not sell, pledge or
otherwise transfer any shares of Common Stock prior to the closing of the Rights
Offering or the termination of its commitment hereunder. The Shareholder's
decision to participate in the Rights Offering contemplated hereby is an
independent decision based upon its own independent analysis and is not based
upon the investment decision of any other person or entity.
Amount Payable to the Shareholder
In consideration of the Shareholder's Equity Commitment:
- Upon DHC and the Shareholder signing this "Equity Commitment for Rights
Offering," the Shareholder shall earn an amount equal to 1.5% of its Equity
Commitment to provide its Equity Commitment through 5/31/05; - On or prior to
5/15/05, for an additional earned amount of .25% of the Shareholder's Equity
Commitment, DHC shall have the option to extend the Shareholder's obligations
hereunder through 6/30/05; - On or prior to 6/15/05, for an additional earned
amount of .25% of the Shareholder's Equity Commitment, DHC shall have the option
to extend the Shareholder's obligations hereunder through 7/31/05; - On or prior
to 7/15/05, for an additional earned amount of .25% of the Shareholder's Equity
Commitment, DHC shall have the option to extend the Shareholder's obligations
hereunder through 8/31/05.
In the event the Rights Offering is not commenced before August 15, 2005 or is
terminated, DHC will be entitled, at its option, to pay any amount earned by the
Shareholder by delivering to the Shareholder a number of shares of Common Stock,
valued based on the 10-day average closing price on the American Stock Exchange
of the Common Stock following failure to commence the Rights Offering by August
15, 2005 or the announcement of the termination of the Rights Offering;
provided, however, that such delivery of shares of Common Stock shall only be
made to the extent it would not result in an unreasonable risk of an ownership
change within the meaning of Section 382 of the Internal Revenue Code. For the
avoidance of doubt, in the event that delivery of such shares would result in an
unreasonable risk of an ownership change within the meaning of Section 382 of
the Internal Revenue Code, DHC shall pay the amounts earned by the Shareholder
in cash. Amounts earned by the Shareholder shall be payable and paid within five
(5) business days of the earliest of (i) the failure to commence the Rights
Offering by August 15, 2005, (ii) final termination of the Rights Offering and
(iii) the closing of the Rights Offering.
In addition, DHC shall reimburse the Shareholder for all reasonable
out-of-pocket fees and expenses of outside legal counsel incurred in connection
with the execution and delivery of this agreement.
Registration Rights
The Shareholder will be granted registration rights with respect to all shares
of common stock of DHC held by it, consistent with that certain registration
rights agreement, dated as of December 2, 2003, by and between DHC and D. E.
Shaw Laminar Portfolios, L.L.C., a Delaware limited liability company, the
Shareholder and Third Avenue Trust, on behalf of The Third Avenue Value Fund
Series, a Delaware business trust, (the "Existing Registration Rights
Agreement"), including immediate shelf registration rights; provided however,
that in addition to the immediate shelf registration rights, the Shareholder
shall be granted demand registration rights with respect to all shares of common
stock of DHC held by the Shareholder as described below, and with respect to any
primary underwritten equity offering initiated by DHC prior to June 30, 2006,
the Shareholder (together with any other shareholders executing an equity
commitment similar to the equity commitment hereunder) and DHC will be subject
to a pro rata "cut back" in the amount of Common Stock to be included therein in
the case any primary underwritten equity offering is scaled back. Whether or not
the Rights Offering is consummated, the Shareholder (together with any other
shareholders executing an equity commitment similar to the equity commitment
hereunder) will be entitled to one secondary underwritten offering under the
registration rights agreement with the participation by DHC in a typical "road
show" process which shall have the full support of DHC and its management,
subject to certain customary limitations (it being understood that if such
offering is suspended by DHC, then such offering shall not count as such
underwritten equity offering). The reasonable fees and expenses (other than
underwriting discounts and commissions) of any such offering will be paid by
DHC. Nothing in the registration rights agreement or otherwise will limit the
applicability of the transfer restrictions contained in DHC's Restated
Certificate of Incorporation, as amended.
DHC and the Shareholder agree to negotiate, execute and deliver an amendment to
the Existing Registration Rights Agreement at or prior to closing of the Rights
Offering, in order to incorporate the terms and conditions described above,
including customary covenants related to an underwritten offering.
Representations and Warranties
DHC makes the representations and warranties set forth on Exhibit A hereto to
the Shareholder. The Shareholder makes to DHC the representations and warranties
set forth on Exhibit B hereto.
Conditions to the Obligations of the Shareholder
The obligations of the Shareholder described herein shall be subject to the
following conditions (which may be waived on behalf of the Shareholder by the
Shareholder in its sole and absolute discretion);
(i) The receipt of all government approvals and consents to consummate the
Acquisition and related transactions as required by law;
(ii) The Rights Offering closing no later than May 31, 2005, as such date may be
extended as provided for herein until August 31, 2005;
(iii) The concurrent consummation of the debt financing (or alternative debt
financing on terms and conditions no less favorable to DHC in the aggregate) on
substantially the same terms and conditions as described in the commitment
letters, as set forth on Exhibit C;
(iv) The representations and warranties set forth on Exhibit A hereto being true
and correct in all material respects as of the date hereof; and
(v) The concurrent consummation of the Acquisition and the Rights Offering.
Termination Rights of the Shareholder
The Shareholder shall have no further obligations hereunder in the event that
the Rights Offering is not closed on or prior to May 31, 2005, as such date may
be extended as provided for herein until August 31, 2005.
DHC's Termination Rights
DHC shall be entitled to terminate its obligations hereunder at any time for any
or no reason by delivery of written notice to the Shareholder; provided,
however, that such termination shall not effect DHC's obligation, if any, to pay
any and all amounts earned by the Shareholder pursuant to this "Equity
Commitment for Rights Offering".
Public Announcements
DHC and the Shareholder shall both agree (such consent not to be reasonably
withheld) as to the content and timing of any press release or other document
disclosing the existence of the Rights Offering, the Equity Commitment, and any
related transactions.
Miscellaneous
This "Equity Commitment for Rights Offering" is made solely for the benefit of
the Shareholder, the affiliates of the Shareholder, and DHC and its affiliates,
and no other person, partnership, association or corporation shall acquire or
have any right under or by virtue of this "Equity Commitment for Rights
Offering".
Neither DHC nor the Shareholder may assign any of its rights (nor delegate any
of its obligations) under this "Equity Commitment for Rights Offering" without
the prior written consent of DHC (if such assignment or delegation is to be made
by the Shareholder) or the Shareholder (if the assignment or delegation is to be
made by DHC).
In case any one or more of the provisions contained in this "Equity Commitment
for Rights Offering," or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect under the laws of any
jurisdiction, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not
be in any way affected or impaired thereby or under the laws of any other
jurisdiction.
This "Equity Commitment for Rights Offering" may not be amended, modified or
changed, in whole or in part, except by an instrument in writing signed by DHC
and the Shareholder.
Binding Commitment
This "Equity Commitment for Rights Offering" made by the Shareholder represents
the binding commitment by, on the one hand, DHC and, on the other hand, the
Shareholder, with respect to the subject matter hereof. Each party executing
this Agreement intends to be legally bound hereby.
Agreed and Acknowledged this 31st day of January, 2005.
DANIELSON HOLDING CORPORATION
By: /s/ ANTHONY J. ORLANDO
-------------------------------------
Title: President and CEO
SZ INVESTMENTS, L.L.C.
By: /s/ DONALD J. LIEBENTRITT
-------------------------------------
Title: Vice President