-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G6EvCOyo7Ivdy26n+6ctuLirV8hpEvuEyVymjF9S2CzGAY138KR+37XLPRr97+yP PvtP0G9C/D2LhLk+vYgGjA== 0000950137-02-003494.txt : 20020607 0000950137-02-003494.hdr.sgml : 20020607 20020604172322 ACCESSION NUMBER: 0000950137-02-003494 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20020604 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: EGI FUND 02 04 INVESTORS LLC CENTRAL INDEX KEY: 0001173271 IRS NUMBER: 400002819 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: TWO NORTH RIVERSIDE PLAZA STREET 2: STE 600 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3124663885 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DANIELSON HOLDING CORP CENTRAL INDEX KEY: 0000225648 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 956021257 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-02837 FILM NUMBER: 02670303 BUSINESS ADDRESS: STREET 1: 767 THIRD AVE 5TH FL CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2128880347 MAIL ADDRESS: STREET 1: 767 THIRD AVE CITY: NEW YORK STATE: NY ZIP: 10017-2023 FORMER COMPANY: FORMER CONFORMED NAME: MISSION EQUITIES CORP DATE OF NAME CHANGE: 19770921 FORMER COMPANY: FORMER CONFORMED NAME: MISSION INSURANCE GROUP INC DATE OF NAME CHANGE: 19900826 SC 13D/A 1 c70067sc13dza.txt AMENDMENT TO SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D/A UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 2)* DANIELSON HOLDING CORPORATION ------------------------------------------------------------------------------- (NAME OF ISSUER) COMMON STOCK, PAR VALUE $0.10 PER SHARE ------------------------------------------------------------------------------- (TITLE OF CLASS OF SECURITIES) 236274106 ------------------------------------------------------------------------------- (CUSIP NUMBER) MARC D. HAUSER EQUITY GROUP INVESTMENTS, L.L.C. TWO NORTH RIVERSIDE PLAZA, SUITE 600 CHICAGO, ILLINOIS 60606 312-454-0101 ------------------------------------------------------------------------------- (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS) MAY 29, 2002 ------------------------------------------------------------------------------- (DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT) IF THE FILING PERSON HAS PREVIOUSLY FILED A STATEMENT OF SCHEDULE 13G TO REPORT THE ACQUISITION THAT IS THE SUBJECT OF THIS SCHEDULE 13D, AND IS FILING THIS SCHEDULE BECAUSE OF SS.240.12D-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 S.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 ("ACT") 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). (continued on following pages) Page 1 of 17 Pages CUSIP NO. 236274106 13D/A Page 2 of 17 Pages - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON SZ Investments, L.L.C. FEIN 36-4150443 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCOURSE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORIGIN Delaware - -------------------------------------------------------------------------------- NUMBER OF SHARES 7 SOLE VOTING POWER BENEFICIALLY 5,460,611 OWNED BY EACH ------------------------------------------------------ REPORTING 8 SHARED VOTING POWER PERSON WITH 0 - -------------------------------------------------------------------------------- 9 SOLE DISPOSITIVE VOTING POWER 5,460,611 - -------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE VOTING POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,460,611 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES* - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 18.0% (1) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* 00 - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! (1) To the best knowledge of SZI, Issuer had 30,366,136 shares of Common Stock outstanding as of May 29, 2002, which amount is based upon (i) 19,760,480 shares of Common Stock outstanding as of May 14, 2002, as set forth in the Issuer's Quarterly Report on Form 10-Q for the period ended March 31, 2002, plus (ii) the issuance of 1,900,437 shares of Common Stock pursuant to the exercise by SZI of a warrant, plus (iii) the issuance of 8,705,219 shares of Common Stock pursuant to a rights offering as publicly announced by the Issuer on May 29, 2002. CUSIP NO. 236274106 13D/A Page 3 of 17 Pages ONLY THOSE ITEMS AMENDED ARE REPORTED HEREIN. CAPITALIZED TERMS NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE SAME MEANING AS THEY HAVE IN THE SCHEDULE 13D. Item 3. Source and Amount of Funds and Other Consideration. Item 3 is hereby amended to add the following: On May 29, 2002, the Issuer closed the Rights Offering. In accordance with the terms of the Rights Offering, SZI purchased 1,560,174 shares of Common Stock at a purchase price of $5.00 per share (the "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 Rights Offering Shares and the Warrant Shares came from the working capital of SZI. The Warrant Shares, the Rights Offering Shares and the Initial Shares are sometimes collectively referred herein to as the "Purchased Shares". Item 4. Purpose of Transaction. Item 4 is hereby amended to add the following: On May 29, 2002, the Issuer closed the Rights Offering. Pursuant to its obligations under the Term Sheet and in accordance with the terms of the Rights Offering, SZI purchased 1,560,174 shares of Common Stock under the Rights Offering and exercised its outstanding Warrant to purchase 1,900,437 shares of Common Stock. Item 5. Interest in Securities of Issuer. Item 5 is hereby amended and restated as follows: (a) and (b) To the best knowledge of SZI, based upon (i) 19,760,480 shares of Common Stock outstanding as of May 14, 2002, as set forth in the Issuer's Quarterly Report on Form 10-Q for the period ended March 31, 2002, plus (ii) the issuance of 1,900,437 shares of Common Stock to SZI upon the exercise of the Warrant, plus (iii) the issuance of 8,705,219 shares of Common Stock pursuant to the Rights Offering as publicly announced by the Issuer on May 29, 2002, there were 30,366,136 shares of Common Stock outstanding as of May 29, 2002. Based upon the foregoing, the 5,460,611 shares of Common Stock beneficially owned by SZI represent approximately 18.0% of the issued and outstanding Common Stock. SZI currently has the sole power to vote or to direct of the vote the Purchased Shares. Except as set forth below, as of the date hereof, neither SZI, nor to the best knowledge of SZI, any of the persons set forth in Item 2 hereof, owns any shares of Common Stock other than the Purchased Shares owned by SZI. Donald Liebentritt owns 48,957 shares of Common Stock, with respect to which Mr. Liebentritt has sole power to vote and to dispose of such shares, and vested options to purchase 10,000 shares with respect to which Mr. Liebentritt has sole power to dispose. William Pate owns 73,438 shares of Common Stock, with respect to which Mr. Pate has sole power to vote and dispose of such shares, and vested options to purchase 25,000 shares with respect to which Mr. Pate has the sole power to dispose. Philip Tinkler owns 11,900 shares of Common Stock, with respect to which Mr. Tinkler has sole power to vote and dispose of such shares, and options to purchase 5,000 shares with respect to which Mr. Tinkler has the sole power to dispose. (c) During the last 60 days, the only transactions in the Common Stock effected by SZI, or to the best knowledge of SZI, any of the persons set forth in Item 2, were (i) the exercise by SZI of the Warrant to acquire 1,900,437 shares of Common Stock as described in Item 3 above, (ii) the acquisition of Common Stock by SZI or such other persons listed in Item 2 under the Rights Offering as described in Item 3 above and (iii) the amendment and restatement of the Term Sheet on April 17, 2002 to reflect an increase in the size of the Rights Offering. A copy of the amended and restated Term Sheet is attached hereto as Exhibit 8. (d) No person other than SZI 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 SZI. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. Item 6 is hereby amended to add the following: CUSIP NO. 236274106 13D/A Page 4 of 17 Pages On April l7, 2002, the Term Sheet was amended and restated to reflect an increase in the size of the Rights Offering. A copy of the amended and restated Term Sheet is attached hereto as Exhibit 8. On May 29, 2002, pursuant to its obligations under the Term Sheet and in accordance with the terms of the Rights Offering, SZI purchased 1,560,174 shares of Common Stock under the Rights Offering at a purchase price of $5.00 per share and exercised its outstanding Warrant to purchase 1,900,437 shares of Common Stock at a purchase price of $4.74 per share. All funds used to purchase the Rights Offering Shares and the Warrant Shares came from the working capital of SZI 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 Investment Agreement (incorporated by reference to Exhibit 10.3 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 4 Assignment and Consent to Assignment of Investment Agreement (incorporated by reference to Exhibit 10.4 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 5 Warrant* Exhibit 6 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 7 Letter Agreement dated April 14, 1999 between Equity Group Investments, L.L.C. and Danielson Holding Corporation and amendments dated June 2, 1999 and April 1, 2002** Exhibit 8 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*** - ---------- * 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 herewith. CUSIP NO. 236274106 13D/A Page 5 of 17 Pages SIGNATURE After a reasonable inquiry and the best of undersigned's knowledge and belief, the undersigned certifies that the information set forth in this Schedule 13D/A is true, complete and accurate. Dated: May 29, 2002 SZ INVESTMENTS, L.L.C. /s/ Donald J. Liebentritt ----------------------------------- Donald J. Liebentritt, Vice President CUSIP NO. 236274106 13D/A Page 6 of 17 Pages EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION PAGE - -------------- ----------- ---- 8 Amended and Restated Summary of Terms of Standby 7 Commitment of Rights Offering between Danielson Holding Corporation and SZ Investments, L.L.C., dated as of April 17, 2002
EX-8 3 c70067exv8.txt AMENDED & RESTATED SUMMARY OF TERMS CUSIP NO. 236274106 13D/A Page 7 of 17 Pages EXHIBIT 8 CUSIP NO. 236274106 13D/A Page 8 of 17 Pages AMENDED AND RESTATED SUMMARY TERMS OF STANDBY COMMITMENT OF RIGHTS OFFERING PARTIES Danielson Holding Corporation ("DHC") SZ Investments, L.L.C. ("Standby Purchaser") BACKGROUND: ACL RECAPITALIZATION There has been proposed a restructuring of the obligations of American Commercial Lines Holdings LLC ("ACL Holdings") and the obligations of American Commercial Lines LLC (the "Company") and the recapitalization of ACL Holdings and the Company on substantially the same terms as the terms described in the term sheet (the "Term Sheet") attached hereto as Exhibit A (collectively, the "Recapitalization"). It is anticipated that the Recapitalization will be implemented either through (a) an out-of-court exchange offer and consent solicitation pursuant to which the Existing Senior Notes (as defined in the Term Sheet) will be exchanged for $120 million of new 11 1/4 % cash pay senior notes due January 1, 2008 and $116.507 million of new 12% pay-in-kind senior subordinated notes due July 1, 2008 on substantially the same terms as the terms described in the Term Sheet (the "Exchange Offer and Consent Solicitation"), or (b) if the Exchange Offer and Consent Solicitation is not consummated, a pre-arranged or pre-packaged plan of reorganization pursuant to the U.S. Bankruptcy Code on substantially the same terms as the terms described in the Term Sheet (the "Pre-Arranged Plan"). ACL Holdings, the Company, DHC and the members of ACL Holdings have signed a recapitalization agreement (the "Recapitalization Agreement"), which is on substantially the same terms as the terms described in the Term Sheet, pursuant to which DHC and/or one or more of its subsidiaries will acquire 100% of the equity interests in ACL Holdings or the Company as set forth in the Recapitalization Agreement. HY I Investments, L.L.C. ("HYI") has entered into a Lock-Up, Support and Voting Agreement dated February 26, 2002, with ACL Holdings, the Company and certain other parties (the "Lock-Up Agreement"). RIGHTS OFFERING In connection with the Recapitalization, DHC shall conduct a rights offering ("Rights Offering") of rights to purchase ("Rights") an aggregate of approximately $43.6 million of newly-issued shares of Common Stock, par value $.01 per share ("Common Stock"), the net proceeds of which shall be used to satisfy DHC's cash contribution obligations in the Recapitalization as described in the Term Sheet and, to the extent of any excess proceeds, general corporate purposes. The purchase price for the Common Stock in the Rights Offering will be $5.00 per share ("Subscription Price"), and the total number of Common Stock shares to be offered will be approximately 8.7 million.
CUSIP NO. 236274106 13D/A Page 9 of 17 Pages The Rights shall be offered to each stockholder (including, without limitation, to Standby Purchaser with respect to the Warrant Shares (as defined below)) on a pro rata basis ("basic subscription right") and shall be non-transferable. Stockholders who fully exercise their basic subscription right shall also be entitled 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 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 insure compliance with Article Fifth. STANDBY PURCHASER WARRANT EXERCISE Provided that the condition precedents specified under the heading "Conditions to Standby Purchaser's Obligations" below have been satisfied, or waived by Standby Purchaser in its sole discretion in writing, then, simultaneously with the closing of the Rights Offering, Standby Purchaser shall exercise in full its warrant dated August 12, 1999, for 1,898,000 Common Stock shares, at a current exercise price of $4.74391 per share ("Warrant"), resulting in the issuance of 1,900,437 Common Stock shares ("Warrant Shares") as a result of such exercise. Notwithstanding the foregoing, for purposes of the Rights Offering, all Warrant shares shall be treated as if exercised such that the Warrant Shares shall have basic subscription rights and oversubscription rights as if the Warrant Shares were in fact issued and outstanding as of the commencement of the Rights Offering. If necessary, DHC shall amend its registration statement to allow the Warrant to participate in the Rights Offering on an "as exercised" basis. STANDBY COMMITMENTS Standby Purchaser shall be obligated to purchase up to 4.0 million Common Stock shares offered in the Rights Offering, (i) which are not otherwise subscribed for pursuant to basic subscription rights and oversubscription rights and (ii) the purchase of which by Standby Purchaser would not require Standby Purchaser to make an HSR filing or insurance regulatory filing(s) or DHC to obtain approval of its stockholders under SEC or AMEX rules or other applicable requirements (either requirement, an "Approval Requirement Limitation") ("Standby Shares"). In the event Standby Purchaser would be otherwise obligated to purchase hereunder Common Stock shares but is relieved of such obligation pursuant to an Approval Requirement Limitation, Standby Purchaser shall 1) file the necessary filings under the HSR Act or applicable insurance regulatory requirements (and DHC shall cooperate with Standby Purchaser in preparing its filing and shall make DHC's required filings) or DHC shall take all actions and prepare and make such filings necessary to obtain approval of it's stockholders, as the case may be, 2) loan to DHC an amount equal to the number of shares it did not purchase due to the Approval Requirement Limitation multiplied by $5.00, at an interest rate of 12% per annum payable in cash with a maturity of the earlier of 170 days after issuance of the loan and the date Standby Purchaser consummates the purchase of shares pursuant to the following clause 3) and on other standard and customary terms (the "Bridge Loan"), and 3) upon clearance under the HSR Act, insurance commissioners or receipt of approval of DHC's stockholders, as the case may be, purchase the Common Stock shares it did not purchase due to the Approval Requirement Limitation provision at $5.00 per share (and DHC shall use such proceeds to repay the Bridge Loan).
CUSIP NO. 236274106 13D/A Page 10 of 17 Pages STANDBY COMMITMENT FEE In consideration of the Standby Purchaser's commitment to purchase Standby Shares, DHC shall pay to Standby Purchaser: 1) $1,000,000 (5% of the aggregate standby commitment) in cash in the event DHC commences the Rights Offering while Standby Purchaser's commitment hereunder is in effect; or 2) $250,000 (1.25% of the aggregate standby commitment) in cash in the event DHC terminates this Summary of Terms or does not commence the Rights Offering (the "Standby Fee"). The Standby Fee shall become payable $250,000 on the date hereof and $750,000 when DHC commences the Rights Offering as set forth in the foregoing clause 1). In addition, DHC shall reimburse Standby Purchaser for all fees and expenses incurred in connection with the transactions contemplated by the Rights Offering, up to $25,000 in the aggregate, plus, if applicable, all fees and expenses incurred in preparation and filing of notices and filings under the HSR Act and insurance regulatory requirements. REGISTRATION RIGHTS All Common Stock shares acquired by Standby Purchaser in the Rights Offering, whether pursuant to the exercise of its basic subscription right, its oversubscription right and/or its standby commitment, shall be registered in a "shelf" registration statement within 60 days following the closing of the Rights Offering. All additional Common Stock shares acquired by Standby Purchaser or its affiliates from time to time after the closing of the Rights Offering shall be added to such shelf registration statement. Finally, Standby Purchaser shall have unlimited demand and piggy-back registration rights with respect all notes of the Company held by Standby Purchaser or its affiliates. DHC and Standby Purchaser agree that they will negotiate, execute and deliver a definitive Registration Rights Agreement (the "Registration Rights Agreement") containing customary covenants, representations, warranties and conditions, including without limitation the terms and conditions described above. REPRESENTATIONS, WARRANTIES AND COVENANTS DHC makes to Standby Purchaser the representations, warranties and covenants set forth on Exhibit B hereto. Standby Purchaser makes to DHC the representations, warranties and covenants set forth on Exhibit C hereto. CONDITIONS TO STANDBY PURCHASER'S OBLIGATIONS The obligations of Standby Purchaser to act as a "standby purchaser" as described herein shall be subject to certain conditions precedent (which may be waived in Standby Purchaser's sole discretion), including, without limitation, the following: (i) An independent and disinterested committee of DHC's Board of Directors having approved the Rights Offering and related transactions after consulting with independent counsel of its own choice and having an independent investment banking firm of national reputation analyze the terms of the Rights Offering and related transactions and advising in a presentation to the committee that such terms are fair and reasonable; (ii) Obtaining all required SEC and AMEX approvals (if any); (iii) With respect to Standby Purchaser, the Lock-Up Agreement to which HYI is a party being in effect with respect to HYI; (iv) The Rights Offering being on file with the SEC no later than April 23, 2002;
CUSIP NO. 236274106 13D/A Page 11 of 17 Pages (v) The execution and delivery by DHC of the Registration Rights Agreement on terms acceptable to Standby Purchaser; (vi) The representations and warranties set forth on Exhibit B hereto being true and correct and the covenants set forth on Exhibit B having been performed; and (vii) The Recapitalization being consummated on substantially the same terms as those set forth in the Term Sheet no later than June 15, 2002 (unless the Recapitalization Agreement has been otherwise extended by no more than 15 days by DHC, ACL Holdings and the Company; provided, that the related right of termination contained in each of the Senior Noteholder Lock-Up Agreement, the DHC Lock-Up Agreement, and the Forbearance Agreement is extended by all parties thereto for the same number of days), and simultaneously with the closing of the Rights Offering. STANDBY PURCHASER'S TERMINATION RIGHTS Standby Purchaser shall be entitled to terminate its obligations to act as standby purchaser hereunder by delivery of written notice to DHC in the event that: (i) the Recapitalization on substantially the same terms as the terms described in the Term Sheet is not consummated on or before June 15, 2002 (unless the Recapitalization Agreement has been otherwise extended by no more than 15 days by DHC, ACL Holdings and the Company; provided, that the related right of termination contained in each of the Senior Noteholder Lock-Up Agreement, the DHC Lock-Up Agreement, and the Forbearance Agreement is extended by all parties thereto for the same number of days) or simultaneously with the closing of the Rights Offering; (ii) HYI terminates the Lock-Up Agreement in accordance with the provisions thereof, or the Lock-Up Agreement otherwise is not in effect with respect to HYI; (iii) the Rights Offering is not on file with the SEC on or before April 23, 2002; (iv) a Pre-Arranged Plan or any other proceeding under the U.S. Bankruptcy Code is filed involving ACL Holdings or the Company; or (v) the Recapitalization Agreement, after being executed and delivered by the proper parties, is terminated or expires prior to consummation of the Recapitalization.
CUSIP NO. 236274106 13D/A Page 12 of 17 Pages DHC'S TERMINATION RIGHT DHC shall be entitled to terminate this Summary of Terms by delivery of written notice to Standby Purchaser in the event that another party provides a standby commitment for no fewer Common Stock shares than Standby Purchaser with respect to the Rights Offering on terms that are materially more favorable to DHC that those provided by Standby Purchaser. PUBLIC ANNOUNCEMENTS DHC and the Standby Purchaser will mutually agree in writing and prior to dissemination on the text of any public announcement that may be made regarding this standby commitment. INDEMNIFICATION DHC agrees to indemnify and hold Standby Purchaser, its affiliates, any of its or their affiliates, and any of its or their respective officers, directors, employees, agents, representatives, successors, members, stockholders, partners, lenders and capital sources (each, a "Standby Purchaser Indemnitee") harmless from and against any and all losses, claims, damages and liabilities, joint or several (including any investigation, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted) (collectively, "Losses"), to which any Standby Purchaser Indemnitee may become subject to the extent resulting from, due to or based upon Standby Purchaser having entered into this Summary of Terms or agreeing to act or acting as a standby purchaser in the Rights Offering under the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or other federal or state statutory law or regulation, at common law or otherwise, insofar as such Losses arise out of or are based upon (i) any inaccuracy in, breach of or failure to comply with, any representation, warranty, or covenant made by DHC in this Summary of Terms, or (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, the Registration Statement or the Prospectus (as defined in Exhibit B)(as amended or supplemented, if DHC shall have filed with the SEC any amendment thereof or supplement thereto), or any amendment or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as any such untrue statement or omission or alleged untrue statement or omission was made in such, preliminary prospectus, the Registration Statement or the Prospectus, or such amendment or supplement in reliance upon, and in conformity with, information furnished in writing to DHC by Standby Purchaser expressly for use therein. DHC agrees to indemnify and hold each Standby Purchaser Indemnitee harmless from and against any and all Losses to which any Standby Purchaser Indemnitee may become subject to the extent resulting from, due to or based upon Standby Purchaser having entered into this Summary of Terms or agreeing to act or acting as Standby Purchaser in accordance with this Summary of Terms; provided, however, if such Losses are solely the result of the amount of the Standby Fee, DHC shall only be obligated for Losses in excess of the amount of the Standby Fee actually paid to Standby Purchaser. Standby Purchaser agrees to indemnify and hold DHC, its affiliates, any of its or their affiliates, and any of its or their respective officers, directors, employees, agents, representatives, successors, members, stockholders, partners, lenders and capital sources (each, a "DHC Indemnitee") harmless from and against any and all Losses to which any DHC Indemnitee may become subject insofar as such Losses arise out of or are based upon any inaccuracy in, breach of or failure to comply with, any representation, warranty, or covenant made by DHC in this Summary of Terms.
CUSIP NO. 236274106 13D/A Page 13 of 17 Pages MISCELLANEOUS This Summary of Terms is made solely for the benefit of Standby Purchaser, the affiliates of Standby Purchaser, the Standby Purchaser Indemnitees and DHC, and no other person, partnership, association or corporation shall acquire or have any right under or by virtue of this Summary of Terms. Neither DHC nor Standby Purchaser may assign any of its rights under this Summary of Terms without the prior written consent of the other party hereto. This Summary of Terms constitutes the entire agreement between Standby Purchaser and DHC with respect to the subject matter hereof (excluding the Bridge Loan and the Registration Rights Agreement), and supersedes all prior agreements and understandings with respect to the subject matter hereof (excluding the Bridge Loan and the Registration Rights Agreement). In case any one or more of the provisions contained in this Summary of Terms, 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 Summary of Terms may not be amended, modified or changed, in whole or in part, except by an instrument in writing signed by DHC and Standby Purchaser. BINDING COMMITMENT This Summary of Terms represents a binding commitment among DHC and Standby Purchaser with respect to the subject matter hereof and is enforceable by any party against the other parties. AGREED AND ACKNOWLEDGED THIS 17TH DAY OF APRIL, 2002. DANIELSON HOLDING CORPORATION BY: /s/ DAVID BARSE -------------------------------------------------- DAVID BARSE, PRESIDENT SZ INVESTMENTS, L.L.C. BY: /s/ DONALD J. LIEBENTRITT -------------------------------------------------- DONALD J. LIEBENTRITT, VICE PRESIDENT
CUSIP NO. 236274106 13D/A Page 14 of 17 Pages EXHIBIT A TERM SHEET CUSIP NO. 236274106 13D/A Page 15 of 17 Pages EXHIBIT B DHC REPRESENTATIONS, WARRANTIES AND COVENANTS DHC represents and warrants to, and covenants with, Standby Purchaser, as of the date hereof and again as of the date of closing of the Rights Offering, as follows: (a) As soon as practicable, but no later than April 23, 2002, DHC shall file with the Securities and Exchange Commission (the "Commission") a prospectus pursuant to Rule 424(b) under the Securities Act (the prospectus first filed hereunder with the Commission is herein called the "Prospectus") with respect to DHC's registration statement on Form S-3 under the Securities Act of 1933 (the "Securities Act") to permit the offer and sale under the Securities Act of such number of Rights and Common Stock shares that might be issued upon exercise of Rights pursuant to the Rights Offering. DHC will file such amendments to the registration statement as may be necessary to permit the registration statement, as so amended, to remain effective. Such registration statement as amended as the date of the Prospectus (the "Prospectus Date"), including all exhibits and all documents incorporated therein by reference, is herein called the "Registration Statement." DHC shall use commercially reasonable efforts to have the Common Stock shares issuable on exercise of the Rights listed for trading on the AMEX. (b) On the Prospectus Date, the Registration Statement and the Prospectus will comply in all material respects with the provisions of the Securities Act and the rules and regulations promulgated thereunder, and on the Prospectus Date neither the Registration Statement nor the Prospectus will contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; except that the foregoing does not apply to statements or omissions in the Registration Statement or the Prospectus made in reliance upon information furnished in writing by Standby Purchaser to DHC expressly for use therein. (c) The documents to be incorporated by reference in the Prospectus (the "Incorporated Documents") at the time filed with the Commission, shall comply as to form in all material respects with the requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and the rules and regulations of the Commission promulgated thereunder, and, when read together with the other information in the Prospectus, will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (d) DHC has all necessary corporate power and authority to execute and deliver this Summary of Terms, and perform its obligations hereunder. The issuance of the Standby Shares to the Standby Purchaser have been duly and validly authorized by DHC and approved by at least a majority of the members of a special committee of the DHC Board of Directors ("Special Committee") of disinterested directors so as to render inapplicable thereto the restrictions contained in Section 203 of the Delaware General Corporation Law, and all determinations and consents necessary for that issuance required under Article Fifth of the Certificate of Incorporation have been obtained, and no other corporate proceedings on the part of DHC are necessary to authorize the issuance and delivery of any Standby shares by DHC. This Summary of Terms is the valid and binding obligation of DHC and is enforceable against DHC by Standby Purchaser in accordance with its terms. CUSIP NO. 236274106 13D/A Page 16 of 17 Pages (e) The Rights and the Common Stock shares (including the Standby Shares) issuable upon exercise of the Rights or sold by DHC under this Agreement have been duly authorized by DHC and will be included in the Registration Statement. The Standby Shares, when issued and delivered by DHC against payment therefor as provided in this Summary of Terms, will be validly issued, fully paid and nonassessable, and Standby Purchaser shall acquire good and valid title to the Standby Shares (and any shares of Common Stock into which they may be convertible), free and clear of all preemptive or similar rights of any third party, purchase options, calls, proxies, voting trusts, voting agreements, judgments, pledges, charges, assessments, levies, escrows, rights of first refusal or first offer, transfer restrictions, mortgages, indentures, claims, liens, equities, mortgages, deeds of trust, deeds to secure debt, security interests and other encumbrances of every kind and nature whatsoever, whether arising by agreement, operation of law or otherwise. No vote of the holders of any class or series of capital stock or other securities of DHC or any subsidiary of DHC is required to approve or effect this Summary of Terms or any transaction contemplated hereby, including, without limitation, under applicable law, applicable stock exchange rules or regulations, the certificate or articles of incorporation (including, without limitation, Article Fifth of DHC's Certificate of Incorporation) or by-laws of DHC or any subsidiary of DHC, or any agreement of any kind applicable to DHC, any subsidiary of DHC, or their assets. (f) The execution, delivery and performance of this Summary of Terms will not (i) conflict with, result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of DHC or any of its subsidiaries pursuant to the terms of, or constitute a default under, any material agreement, indenture or instrument to which DHC or any of its subsidiaries is a party, or (ii) result in a violation of the Certificate of Incorporation or By-laws of DHC or any of its subsidiaries or any order, rule or regulation of any court or governmental agency having jurisdiction over DHC or any of its subsidiaries or any of their respective properties. Except as required by the Securities Act, the Exchange Act and applicable state securities law, no consent, authorization or order of, or filing or registration with, any court or governmental agency is required for the execution, delivery and performance of this Summary of Terms. (h) The Board and the Special Committee have taken all steps reasonably necessary to ensure that the Rights Offering and the transactions contemplated hereby satisfy all applicable Delaware corporate law (including, without limitation, for example, "fair price" and "fair procedure" requirements, to the extent applicable). CUSIP NO. 236274106 13D/A Page 17 of 17 Pages EXHIBIT C STANDBY PURCHASER REPRESENTATIONS, WARRANTIES AND COVENANTS (a) Standby Purchaser has all necessary corporate power and authority to execute and deliver this Summary of Terms, and perform its obligations hereunder. The execution, delivery and performance by Standby Purchaser of this Summary of Terms and the transactions contemplated hereby have been duly and validly authorized and approved, and no other corporate proceedings on the part of Standby Purchaser are necessary to authorize such execution, delivery and performance by Standby Purchaser. This Summary of Terms is the valid and binding obligation of Standby Purchaser and is enforceable against Standby Purchaser by DHC in accordance with its terms. (b) The execution, delivery and performance of this Summary of Terms will not (i) conflict with, result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of Standby Purchaser or any of its subsidiaries pursuant to the terms of, or constitute a default under, any material agreement, indenture or instrument to which Standby Purchaser or any of its subsidiaries is a party, or (ii) result in a violation of the Certificate of Formation or Operating Agreement of Standby Purchaser or any order, rule or regulation of any court or governmental agency having jurisdiction over Standby Purchaser. Except as required by the Securities Act, the Exchange Act and applicable state securities law, no consent, authorization or order of, or filing or registration with, any court or governmental agency is required for the execution, delivery and performance of this Summary of Terms. -----END PRIVACY-ENHANCED MESSAGE-----