Exhibit 99.1
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 outofcourt 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 111/4% cash
pay senior notes due January 1, 2008 and $116.507
million of new 12% payinkind 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 prearranged or prepackaged plan of
reorganization pursuant to the U.S. Bankruptcy Code
on substantially the same terms as the terms
described in the Term Sheet (the "PREARRANGED 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
LockUp, Support and Voting Agreement dated February
26, 2002, with ACL Holdings, the Company and certain
other parties (the "LOCKUP 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.
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 nontransferable. 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
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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 180 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).
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 be paid
$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.
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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 piggyback 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
LockUp 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 20, 2002;
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(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 LockUp Agreement, the DHC LockUp
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 LockUp Agreement, the DHC LockUp
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 LockUp Agreement in
accordance with the provisions thereof, or the LockUp
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 20, 2002;
(iv) a PreArranged 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.
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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
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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.
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.
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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 21ST DAY OF MARCH, 2002.
DANIELSON HOLDING CORPORATION
BY: /s/ David Barse
-----------------------------------
DAVID BARSE, PRESIDENT
SZ INVESTMENTS, L.L.C.
BY: /s/ William C. Pate
-----------------------------------
WILLIAM C. PATE, VICE PRESIDENT
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