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EXECUTION COPY
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LOAN AGREEMENT
Between
CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY
And
MADERA DISPOSAL SYSTEMS, INC.
Dated as of June 1, 1998
relating to
$1,800,000
California Pollution Control Financing Authority
Variable Rate Demand
Solid Waste Disposal Revenue Bonds
(Madera Disposal Systems, Inc. Project)
Series 1998A
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LOAN AGREEMENT
TABLE OF CONTENTS
Page
PARTIES ................................................................................... 1
PREAMBLES .................................................................................. 1
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS................................................. 2
SECTION 1.2. NUMBER AND GENDER................................................... 2
SECTION 1.3. ARTICLES, SECTIONS, ETC............................................. 2
ARTICLE II
REPRESENTATIONS
SECTION 2.1. REPRESENTATIONS OF THE AUTHORITY.................................... 2
SECTION 2.2. REPRESENTATIONS OF THE BORROWER..................................... 3
ARTICLE III
CONSTRUCTION OF THE PROJECT; ISSUANCE OF THE 1998A BONDS
SECTION 3.1. AGREEMENT TO CONSTRUCT THE PROJECT.................................. 4
SECTION 3.2. DISBURSEMENTS FROM THE CONSTRUCTION FUND;
DISBURSEMENTS FROM THE COSTS OF ISSUANCE FUND....................... 5
SECTION 3.3. ESTABLISHMENT OF COMPLETION DATE; OBLIGATION
OF BORROWER TO COMPLETE............................................. 6
SECTION 3.4. INVESTMENT OF MONEYS IN FUND........................................ 7
SECTION 3.5. ISSUANCE OF ADDITIONAL BONDS........................................ 7
ARTICLE IV
LOANS OF PROCEEDS; REPAYMENT PROVISIONS
SECTION 4.1. LOAN OF BOND PROCEEDS; ISSUANCE OF BONDS............................ 8
SECTION 4.2. REPAYMENT AND PAYMENT OF OTHER AMOUNTS
PAYABLE............................................................. 8
SECTION 4.3. UNCONDITIONAL OBLIGATION............................................ 10
SECTION 4.4. ASSIGNMENT OF AUTHORITY'S RIGHTS.................................... 10
SECTION 4.5. AMOUNTS REMAINING IN FUNDS.......................................... 10
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ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
SECTION 5.1. RIGHT OF ACCESS TO THE PROJECT...................................... 11
SECTION 5.2. THE BORROWER'S MAINTENANCE OF ITS EXISTENCE;
ASSIGNMENTS......................................................... 11
SECTION 5.3. RECORDS AND FINANCIAL STATEMENTS OF BORROWER........................ 13
SECTION 5.4. INSURANCE........................................................... 13
SECTION 5.5. MAINTENANCE AND REPAIR; TAXES; UTILITY AND
OTHER CHARGES....................................................... 13
SECTION 5.6. QUALIFICATION IN CALIFORNIA......................................... 14
SECTION 5.7. ALTERNATE CREDIT FACILITY........................................... 14
SECTION 5.8. LETTER OF CREDIT.................................................... 15
SECTION 5.9. GENERAL TAX COVENANTS; REBATE....................................... 16
SECTION 5.10. SPECIAL ARBITRAGE CERTIFICATIONS.................................... 16
SECTION 5.11. NOTICE AND CERTIFICATES TO TRUSTEE.................................. 16
SECTION 5.12. FINANCING AND CONTINUATION STATEMENTS............................... 17
SECTION 5.13. CHANGE IN INTEREST RATES............................................ 17
SECTION 5.14. CONTINUING DISCLOSURE............................................... 17
ARTICLE VI
DAMAGE, DESTRUCTION AND CONDEMNATION;
USE OF PROCEEDS
SECTION 6.1. OBLIGATION TO CONTINUE PAYMENTS..................................... 17
SECTION 6.2. APPLICATION OF NET PROCEEDS......................................... 18
SECTION 6.3. INSUFFICIENCY OF NET PROCEEDS....................................... 18
SECTION 6.4. DAMAGE TO OR CONDEMNATION OF OTHER PROPERTY......................... 19
ARTICLE VII
LOAN DEFAULT EVENTS AND REMEDIES
SECTION 7.1. LOAN DEFAULT EVENTS................................................. 19
SECTION 7.2. REMEDIES ON DEFAULT................................................. 20
SECTION 7.3. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES....................... 21
SECTION 7.4. NO REMEDY EXCLUSIVE................................................. 21
SECTION 7.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER.......................... 22
ARTICLE VIII
PREPAYMENT
SECTION 8.1. REDEMPTION OF BONDS WITH PREPAYMENT MONEYS.......................... 22
SECTION 8.2. OPTIONS TO PREPAY INSTALLMENTS...................................... 22
SECTION 8.3. MANDATORY PREPAYMENT................................................ 22
SECTION 8.4. AMOUNT OF PREPAYMENT................................................ 23
SECTION 8.5. NOTICE OF PREPAYMENT................................................ 23
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ARTICLE IX
NON-LIABILITY OF AUTHORITY; EXPENSES; INDEMNIFICATION
SECTION 9.1. NON-LIABILITY OF AUTHORITY.......................................... 24
SECTION 9.2. EXPENSES............................................................ 24
SECTION 9.3. INDEMNIFICATION..................................................... 24
ARTICLE X
MISCELLANEOUS
SECTION 10.1. NOTICES............................................................. 25
SECTION 10.2. SEVERABILITY........................................................ 26
SECTION 10.3. EXECUTION OF COUNTERPARTS........................................... 26
SECTION 10.4. AMENDMENTS, CHANGES AND MODIFICATIONS............................... 26
SECTION 10.5. GOVERNING LAW; VENUE................................................ 26
SECTION 10.6. AUTHORIZED REPRESENTATIVE........................................... 26
SECTION 10.7. TERM OF THE AGREEMENT............................................... 27
SECTION 10.8. BINDING EFFECT...................................................... 27
SECTION 10.9. SURVIVAL OF FEE OBLIGATION.......................................... 27
SECTION 10.10. PURCHASE OF BONDS................................................... 27
SECTION 10.11. COMPLETE AGREEMENT.................................................. 27
EXECUTION .................................................................................S-1
EXHIBIT A DESCRIPTION OF THE PROJECT......................................................A-1
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of June 1, 1998, between CALIFORNIA
POLLUTION CONTROL FINANCING AUTHORITY, a public instrumentality and political
subdivision of the State of California (the "Authority"), and MADERA DISPOSAL
SYSTEMS, INC. (the "Borrower")
W I T N E S S E T H:
WHEREAS, the Authority is a public instrumentality and political
subdivision of the State of California, created by the California Pollution
Control Financing Authority Act (constituting Division 27 of the Health and
Safety Code of the State of California as now in effect and as it may from time
to time hereafter be amended or supplemented) (the "Act") and authorized to
finance certain capital projects consisting of solid waste pollution control
facilities;
WHEREAS, the Authority is further authorized to issue its bonds
for the purpose of paying all or any part of the costs of a project, and for any
other authorized purpose; to acquire and hold property, including funds, project
agreements and other obligations of any kind, and pledge, encumber or assign the
same, or the revenues therefrom or any portion of such revenues, or other
rights, whether then owned or possessed, or thereafter acquired, for the benefit
of the owners, and as security or additional security for any bonds or the
performance of obligations under an indenture; to provide for the advance of
bond proceeds and other funds pursuant to Project agreements as necessary to pay
or reimburse for project costs; and to enter into loan agreements; and
WHEREAS, the Borrower has duly caused an application to be filed
with the Authority for financial assistance to construct certain solid waste
disposal facilities to be located in Madera County, California, as more
particularly described in Exhibit A hereto (the "Project"), which qualify as a
"project" under the Act; and
WHEREAS, the Authority after due investigation and deliberation
has adopted its resolutions approving said application and authorizing the
making of a loan to the Borrower for the acquisition, construction and
installation of the Project at such locations; and
WHEREAS, the Authority proposes to issue its California Pollution
Control Financing Authority Variable Rate Demand Solid Waste Disposal Revenue
Bonds (Madera Disposal Systems, Inc. Project) Series 1998A (the "1998A Bonds"),
in the aggregate principal amount of $1,800,000, to finance a portion of the
cost of acquiring, constructing and installing the Project upon the terms and
conditions set forth herein; and
WHEREAS, the Authority will enter into an Indenture, dated as of
June 1, 1998 (the "Indenture"), with BNY Western Trust Company as trustee (the
"Trustee"), pursuant to which the 1998A Bonds will be issued; and
WHEREAS, payment of the 1998A Bonds is initially enhanced by a
direct-pay irrevocable Letter of Credit issued to the Trustee by BankBoston,
N.A. (the "Bank");
NOW, THEREFORE, for and in consideration of the premises and the
material
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covenants hereinafter contained, the parties hereto hereby formally covenant,
agree and bind themselves as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS. Unless the context otherwise
requires, the terms used in this Agreement shall have the meanings specified in
Section 1.01 of the Indenture, as originally executed or as it may from time to
time be supplemented or amended as provided therein.
SECTION 1.2. NUMBER AND GENDER. The singular form of any word
used herein, including the terms defined in Section 1.01 of the Indenture, shall
include the plural, and vice versa. The use herein of a word of any gender shall
include all genders.
SECTION 1.3. ARTICLES, SECTIONS, ETC. Unless otherwise specified,
references to Articles, Sections and other subdivisions of this Agreement are to
the designated Articles, Sections and other subdivisions of this Agreement as
amended from time to time. The words "hereof," "herein," "hereunder" and words
of similar import refer to this Agreement as a whole. The headings or titles of
the several articles and sections, and the table of contents appended to copies
hereof, shall be solely for convenience of reference and shall not affect the
meaning, construction or effect of the provisions hereof.
ARTICLE II
REPRESENTATIONS
SECTION 2.1. REPRESENTATIONS OF THE AUTHORITY. The Authority
makes the following representations as the basis for its undertakings herein
contained:
(a) The Authority is a public instrumentality and political
subdivision of the State of California. Under the provisions of the Act, the
Authority has the power to enter into the transactions contemplated by this
Agreement and the Indenture and to carry out its obligations hereunder. The
Project constitutes a "project" as that term is defined in the Act. By proper
action, the Authority has been duly authorized to execute, deliver and duly
perform its obligations under this Agreement and the Indenture.
(b) On January 28, 1998, the Authority gave its preliminary
approval for the financing of the Project. On March 19, 1998, a public hearing
with respect to the 1998A Bonds and the Project was held in accordance with the
provisions of the Code. On March 25, 1998, the Authority adopted its resolution
approving financing of the Project.
(c) The Authority has taken proper action to allocate to the
1998A Bonds a share of the State ceiling on private activity bonds (as defined
in Section 141 of the Code), which was available to the Authority pursuant to
Section 146 of the Code, in an aggregate amount at
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least equal to the $1,800,000 aggregate principal amount of the 1998A Bonds.
Issuance of the 1998A Bonds will not violate any provisions of said Section 146.
(d) The Authority will issue the Bonds under and the Bonds will
be secured by the Indenture, pursuant to which the Authority's interest in this
Agreement (except certain rights of the Authority to payment for expenses and
indemnification and to inspection and consent) will be pledged to the Trustee as
security for payment of the principal of, premium, if any, and interest on the
Bonds and then to the Bank as security for the payment of the obligations of the
Borrower under the Reimbursement Agreement.
(e) The Authority has not pledged and will not pledge its
interest in this Agreement for any purpose other than to secure the Bonds under
the Indenture and the obligations of the Borrower under the Reimbursement
Agreement.
(f) The Authority is not in default under any of the provisions
of the laws of the State of California which default would affect its existence
or its powers referred to in subsection (a) of this Section 2.1.
(g) The Authority has found and determined and hereby finds and
determines that (i) the Borrower is a "participating party" as such term is
defined in the Act; (ii) the loan to be made hereunder with the proceeds of the
1998A Bonds will promote the purposes of the Act by providing funds to finance
the acquisition, rehabilitation and equipping of the Project; (iii) said loan is
in the public interest, serves the public purposes and meets the requirements of
the Act; and (iv) the portion of such loan allocable to the Costs of the Project
does not exceed the total cost thereof as determined by the Borrower and
approved by the Authority.
(h) No member, officer or other official of the Authority has any
financial interest whatsoever in the Borrower or in the transactions
contemplated by this Agreement and the Indenture.
(i) Based upon representations of ▇▇▇▇▇▇▇▇, Cone & ▇▇▇▇▇▇▇▇▇ in
the Bond Purchase Contract (as hereinafter defined), the Authority has approved
the use of a single Official Statement for the Bonds.
SECTION 2.2. REPRESENTATIONS OF THE BORROWER. The Borrower makes
the following representations as the basis for its undertakings herein
contained:
(a) The Borrower is a corporation duly formed under the laws of
the State of California, is in good standing in the State of California and has
the power to enter into and has duly authorized, by proper action, the execution
and delivery of this Agreement, the Remarketing Agreement, the Reimbursement
Agreement and all other documents contemplated hereby to be executed by the
Borrower.
(b) Neither the execution and delivery of this Agreement, the
Remarketing Agreement or the Reimbursement Agreement, the consummation of the
transactions contemplated hereby and thereby, nor the fulfillment of or
compliance with the terms and conditions hereof and
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thereof, conflicts with or results in a breach of any of the terms, conditions
or provisions of the Borrower's Articles of Incorporation or Bylaws or of any
material corporate actions or of any material agreement or instrument to which
the Borrower is now a party or by which it is bound, or constitutes a default
(with due notice or the passage of time or both) under any of the foregoing, or
results in the creation or imposition of any prohibited lien, charge or
encumbrance whatsoever upon any of the property or assets of the Borrower under
the terms of any material instrument or agreement to which the Borrower is now a
party or by which it is bound.
(c) The Costs of the Project are as set forth in the Tax
Certificate dated the Date of Delivery and have been determined in accordance
with standard engineering/construction and accounting principles. All the
information and representations in the Tax Certificate are true and correct as
of the date thereof.
(d) The Project consists of various equipment and facilities
described in Exhibit A and the Borrower shall not make any changes to the
Project or to the operation thereof which would affect the qualification of the
Project under the Act or impair the exemption from federal income taxation of
the interest on the 1998A Bonds. In particular, the Borrower shall comply with
all requirements set forth in the Tax Certificate. The Borrower intends to own
and cause to be operated the Project as solid waste disposal facilities
described by the Act until the principal of, the premium, if any, and the
interest on the 1998A Bonds shall have been paid in full.
(e) The Borrower has a sufficient interest in the property
comprising the Project sufficient to carry out the purposes of this Agreement.
(f) All certificates, approvals, permits and authorizations of
applicable local governmental agencies, the State of California and the federal
government which are required to date for the Project have been obtained and
continue in force.
(g) No event has occurred and no condition exists which would
constitute an Event of Default (as defined in the Indenture) or which, with the
passing of time or with the giving of notice or both would become such an Event
of Default.
(h) To the best of the knowledge of the Borrower, no member,
officer, or other official of the Authority has any interest whatsoever in the
Borrower or in the transactions contemplated by this Agreement.
(i) The Borrower is a "Small Business" as classified pursuant to
Title 13 Code of Federal Regulations, Part 121 (1990 edition) or has 500
employees or less, and is otherwise eligible for assistance from the Small
Business Assistance Fund.
ARTICLE III
CONSTRUCTION OF THE PROJECT; ISSUANCE OF THE 1998A BONDS
SECTION 3.1. AGREEMENT TO CONSTRUCT THE PROJECT. The
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Borrower agrees that it will equip, construct, rehabilitate and install, or
complete the construction, equipping, rehabilitation and installation of, the
Project, and will acquire, equip, construct, rehabilitate and install all other
facilities and real and personal property deemed necessary for the operation of
the Project, substantially in accordance with the description of the Project
prepared by the Borrower and approved by the Authority, including any and all
supplements, amendments and additions or deletions thereto or therefrom, it
being understood that the approval of the Authority shall not be required for
changes in such description which do not substantially alter the purpose and
description of the Project as set forth in Exhibit A hereto. The Borrower
further agrees to proceed with due diligence to complete the Project within
three years from the date hereof.
In the event that the Borrower desires to alter or change the
Project, and such alteration or change substantially alters the purpose and
description of the Project as described in Exhibit A hereto, the Authority may
enter into such changes in its discretion and, if it agrees to do so, will
instruct the Trustee to consent to, such amendment or supplement to Exhibit A as
shall be required to reflect such alteration or change to the Project upon
receipt of:
(i) a certificate of the Authorized Representative of the
Borrower describing in detail the proposed changes and stating that they
will not have the effect of disqualifying the Project as facilities that
may be financed pursuant to the Act;
(ii) a copy of the proposed form of amended or supplemented
Exhibit A hereto;
(iii) an opinion of Bond Counsel that such proposed changes will
not adversely affect the Tax-exempt status of interest on the Bonds; and
(iv) the written approval of the Bank.
SECTION 3.2. DISBURSEMENTS FROM THE CONSTRUCTION FUND;
DISBURSEMENTS FROM THE COSTS OF ISSUANCE FUND. (a) The Borrower will authorize
and direct the Trustee, upon compliance with Section 3.03 of the Indenture, to
disburse the moneys in the 1998A Construction Account to or on behalf of the
Borrower only for the following purposes (and not for Costs of Issuance),
subject to the provisions of Section 3.3 hereof:
(i) Payment to the Borrower of such amounts, if any, as shall be
necessary to reimburse the Borrower in full for all advances and payments made
by it, at any time prior to or after the delivery of the 1998A Bonds, in
connection with (A) the preparation of plans and specifications for the Project
(including any preliminary study or planning of the Project or any aspect
thereof) and (B) subject to any limitation imposed by subsection (vi) hereof,
the acquisition, equipping, construction, rehabilitation and installation of the
Project.
(ii) Payment for labor, services, materials and supplies used by
or furnished to the Borrower to improve the site and to acquire, equip,
construct and install the Project, as provided in the plans, specifications and
work orders therefor; payment of the costs of acquiring,
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equipping, constructing, and installing utility services or other related
facilities; payment of the costs of acquiring all real and personal property
deemed necessary to construct the Project; insurance during the construction
period as required by the Reimbursement Agreement; and payment of the
miscellaneous expenses incidental to any of the foregoing items.
(iii) Payment of the fees, if any, of architects, engineers,
legal counsel and supervisors expended in connection with the acquisition,
equipping, construction, rehabilitation and installation of the Project.
(iv) Payment of taxes including property taxes, assessments and
other charges, if any, that may become payable during the construction period
with respect to the Project, or reimbursement thereof, if paid by the Borrower.
(v) Payment of expenses incurred in seeking to enforce any remedy
against any contractor or subcontractor in respect of any default under a
contract relating to the acquisition, equipping, construction, rehabilitation or
installation of the Project.
(vi) Payment of any other Costs of the Project permitted by the
Tax Certificate (including, without limitation, interest accruing on the 1998A
Bonds during the construction period of the Project and reimbursement to the
Borrower of costs of financing the Costs of the Project, but not including any
Costs of Issuance).
All moneys remaining in the 1998A Construction Account after the
Completion Date and after payment or provision for payment of all other items
provided for in the preceding subsections (i) to (vi), inclusive, of this
Section, shall be used in accordance with Section 3.03 of the Indenture.
Each of the payments referred to in this Section 3.2(a) shall be
made upon receipt by the Trustee of a written requisition in the form prescribed
by Section 3.03 of the Indenture, signed by the Authorized Representative of the
Borrower.
(b) The Borrower will authorize and direct the Trustee, upon
compliance with Section 3.04 of the Indenture, to disburse the moneys in the
1998A Costs of Issuance Account to or on behalf of the Borrower only for Costs
of Issuance. Each of the payments referred to in this Section 3.2(b) shall be
made upon receipt by the Trustee of a written requisition in the form prescribed
by Section 3.04 of the Indenture, signed by the Authorized Representative of the
Borrower, and, in the case of withdrawals from the Authority Subaccount, the
Acting Executive Director or Deputy Executive Director of the Authority.
SECTION 3.3. ESTABLISHMENT OF COMPLETION DATE; OBLIGATION OF
BORROWER TO COMPLETE. As soon as the Project is completed, the Authorized
Representative of the Borrower, on behalf of the Borrower, shall evidence the
Completion Date by providing a certificate, which shall be approved by the Bank,
to the Trustee and the Authority stating the Costs of the Project and further
stating that (i) the acquisition, equipping, rehabilitation and construction of
the Project has been completed substantially in accordance with the plans,
specifications and work orders therefor, and all labor, services,
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materials and supplies used in the acquisition, equipping, rehabilitation and
construction have been paid or provided for, and (ii) all other facilities
necessary in connection with the Project have been acquired, constructed and
installed in accordance with the plans and specifications and work orders
therefor and all costs and expenses incurred in connection therewith have been
paid or provided for. Notwithstanding the foregoing, such certificate may state
that it is given without prejudice to any rights of the Borrower against third
parties for any claims or for the payment of any amount not then due and payable
which has been incurred at the date of such certificate or which may
subsequently be incurred.
At the time such certificate is delivered to the Trustee, moneys
remaining in the 1998A Construction Account (other than moneys relating to
provisional payments permitted by Section 3.2), including any earnings resulting
from the investment of such moneys, shall be used as provided in Section 3.03 of
the Indenture.
In the event the moneys in the 1998A Construction Account
available for payment of the Costs of the Project should be insufficient to pay
the costs thereof in full, the Borrower agrees to pay directly, or to deposit in
the 1998A Construction Account moneys sufficient to pay, any costs of completing
the Project in excess of the moneys available for such purpose in such
Construction Accounts. The Authority makes no express or implied warranty that
the moneys deposited in the 1998A Construction Account and available for payment
of the Costs of the Project, under the provisions of this Agreement, will be
sufficient to pay all the amounts which may be incurred for such Cost. The
Borrower agrees that if, after exhaustion of the moneys in the 1998A
Construction Account, the Borrower should pay, or deposit moneys in the 1998A
Construction Account for the payment of, any portion of the Costs of the Project
pursuant to the provisions of this Section, it shall not be entitled to any
reimbursement therefor from the Authority, from the Trustee or from the holders
of any of the Bonds, nor shall it be entitled to any diminution of the amounts
payable under Section 4.2 hereof.
SECTION 3.4. INVESTMENT OF MONEYS IN FUND. Any moneys in any fund
or account held by the Trustee shall, at the written request of the Authorized
Representative of the Borrower, be invested or reinvested by the Trustee as
provided in the Indenture. Such investments shall be held by the Trustee and
shall be deemed at all times a part of the fund or account from which such
investments were made, and the interest accruing thereon, and any profit or loss
realized therefrom, shall be credited or charged to such fund or account.
SECTION 3.5. ISSUANCE OF ADDITIONAL BONDS. If the Borrower is not
in default hereunder, the Authority may by the adoption of an appropriate
resolution or resolutions, at the request of the Borrower, authorize the
issuance of Additional Bonds upon the terms and conditions provided herein and
in Sections 2.12 and 2.13 of the Indenture, but in no event shall the Authority
be liable for not issuing such Additional Bonds. Additional Bonds may only be
issued to provide funds to pay any one or more of the following: (i) the costs
of completing the Project; (ii) the costs of making at any time or from time to
time such substitutions, additions, modifications and improvements to the
Project or any portion thereof, or financing other facilities within the State
which qualify as a "project" under the Act, all as authorized by the Act, as the
Borrower may deem necessary or desirable; (iii) the costs of
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refunding, to the extent permitted, any Bonds then Outstanding; and (iv) the
costs of the issuance and sale of the Additional Bonds, interest expenses during
the construction period and other costs reasonably related to the financing as
shall be agreed upon by the Borrower and the Authority. Prior to the issuance of
such Additional Bonds, the terms thereof, the purchase price to be paid therefor
and the manner in which the proceeds therefrom are to be disbursed shall have
been approved in writing by the Borrower; the Authority shall have entered into
an amendment to this Agreement to provide that, for all purposes of this
Agreement, the Project shall include any facilities and/or equipment being
financed by the Additional Bonds, which facilities and/or equipment shall be
described in amendments to Exhibit A hereto, and to provide for an increase in
the amount payable under Section 4.2 hereof as shall be necessary to pay the
principal of, premium, if any, and interest on the Additional Bonds as provided
in the supplemental indenture required by Sections 2.12 and 2.13 of the
Indenture, and to extend the term of this Agreement if the maturity of any of
the Additional Bonds would otherwise occur after the expiration of the term of
this Agreement; and the Authority shall have otherwise complied with the
provisions of Sections 2.12 and 2.13 of the Indenture with respect to the
issuance of such Additional Bonds.
ARTICLE IV
LOANS OF PROCEEDS; REPAYMENT PROVISIONS
SECTION 4.1. LOAN OF BOND PROCEEDS; ISSUANCE OF BONDS. The
Authority covenants and agrees, upon the terms and conditions in this Agreement,
to make a loan to the Borrower for the purpose of financing the Costs of the
Project and the Costs of Issuance. The Authority further covenants and agrees
that it shall take all actions within its authority to keep this Agreement in
effect in accordance with its terms. Pursuant to said covenants and agreements,
the Authority will issue the Bonds upon the terms and conditions contained in
this Agreement and the Indenture and will cause the Bond proceeds to be applied
as provided in Article III of the Indenture.
SECTION 4.2. REPAYMENT AND PAYMENT OF OTHER AMOUNTS PAYABLE. (a)
On or before one Business Day prior to each Bond Payment Date (as hereinafter
defined), until the principal of, premium, if any, and interest on, the Bonds
shall have been fully paid or provision for such payment shall have been made as
provided in the Indenture, the Borrower covenants and agrees to pay to the
Trustee as a repayment on the loan made to the Borrower from Bond proceeds
pursuant to Section 4.1 hereof, a sum equal to the amount payable on the next
Bond Payment Date as principal of and premium, if any, and interest on, the
Bonds as provided in the Indenture. Such Loan Repayments shall be made in
federal funds or other funds immediately available at the Corporate Trust Office
of the Trustee. The term "Bond Payment Date" as used in this Section shall mean
any date upon which any amounts payable with respect to the Bonds shall become
due, whether upon redemption (including without limitation sinking fund
redemption), acceleration, maturity or otherwise.
Each payment made pursuant to this Section 4.2(a) shall at all
times be sufficient to pay the total amount of interest and principal (whether
at maturity or upon redemption or acceleration) and premium, if any, becoming
due and payable on the Bonds on each Bond Payment Date; provided that on the
Business Day prior to each Bond Payment Date, any amount
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held by the Trustee in the Revenue Fund on the due date for a Loan Repayment
hereunder shall be credited against the installment due on such date to the
extent available for such purpose under the terms of the Indenture; and provided
further that, subject to the provisions of this paragraph, if at any time the
amounts held by the Trustee in the Revenue Fund are sufficient to pay all of the
principal of and interest and premium, if any, on, the Bonds as such payments
become due, the Borrower shall be relieved of any obligation to make any further
payments under the provisions of this Section. Notwithstanding the foregoing, if
on any date the amount held by the Trustee in the Revenue Fund is insufficient
to make any required payments of principal of (whether at maturity or upon
redemption (including without limitation sinking fund redemption) or
acceleration) and interest and premium, if any, on, the Bonds as such payments
become due, the Borrower shall forthwith pay such deficiency as a Loan Repayment
hereunder.
The obligation of the Borrower to make any payment under this
Section 4.2(a) shall be deemed to have been satisfied to the extent of any
corresponding payment made by the Bank to the Trustee under the Letter of
Credit.
(b) The Borrower also agrees to pay (i) the annual fee of the
Trustee and the Tender Agent for its ordinary services rendered as trustee, and
its ordinary expenses incurred under the Indenture, as and when the same become
due, (ii) the reasonable fees, charges and expenses (including reasonable legal
fees and expenses) of the Trustee, as bond registrar and paying agent, and the
reasonable fees of any other paying agent on the Bonds as provided in the
Indenture, as and when the same become due, (iii) the reasonable fees, charges
and expenses of the Trustee for the necessary extraordinary services rendered by
it and extraordinary expenses incurred by it under the Indenture, as and when
the same become due, (iv) the cost of printing any Bonds required to be
furnished by the Authority at the expense of the Authority, and (v) any amounts
required to be deposited in the Rebate Fund to comply with the provisions of
Section 5.10 hereof and Section 6.06 of the Indenture and the payment of any
rebate analyst. The Trustee's compensation shall not be limited by any provision
of law regarding the compensation of a Trustee of an express trust.
(c) The Borrower also agrees to pay, (i) as soon as practicable
after receipt of request for payment thereof, all expenses required to be paid
by the Borrower under the terms of the Bond Purchase Contract relating to the
sale of the Bonds, executed by the Treasurer of the State, the Authority,
▇▇▇▇▇▇▇▇, Cone & ▇▇▇▇▇▇▇▇▇ and the Borrower (the "Bond Purchase Contract"); (ii)
at the time of Bond closing, the Authority's administrative fee in the amount of
two-tenths of one percent of the original principal amount of the Bonds (less
any amounts previously paid by the Borrower to the Authority); and (iii) all
reasonable expenses of the Authority related to the Project which are not
otherwise required to be paid by the Borrower under the terms of this Agreement;
provided that the Authority shall have obtained the prior written approval of
the Authorized Borrower Representative for any expenditures other than those
provided for herein or in the Bond Purchase Contract.
(d) The Borrower also agrees to pay fees and expenses of
independent certified public accountants necessary for the preparation of annual
or other audits, reports or summaries thereof required by the Indenture or by
the Authority, including a report of an independent certified public accountant
with respect to any fund established under the Indenture;
14
and reasonable expenses of the Authority pursuant to Sections 44525 and 44548 of
the California Health and Safety Code, and any agency of the State of California
selected by the Authority to act on its behalf in connection with the Bonds,
including any and all reasonable expenses incurred by the Attorney General of
the State of California in connection with any litigation which may at any time
be instituted involving the Bonds.
(e) In the event the Borrower should fail to make any of the
payments required by Subsections (a) through (d) of this Section, such payments
shall continue as obligations of the Borrower until such amounts shall have been
fully paid. The Borrower agrees to pay such amounts, together with interest
thereon until paid, to the extent permitted by law, at the rate of seven percent
(7%) per annum or, if seven percent is greater than the rate then permitted by
law, at the maximum rate so permitted, following a delinquency of 30 days or
longer until such amount has been paid. Interest on overdue payments required
under subsection (a) above shall be applied as provided in Sections 5.02 and
5.03 of the Indenture.
SECTION 4.3. UNCONDITIONAL OBLIGATION. The obligations of the
Borrower to make the payments required by Section 4.2 hereof and to perform and
observe the other agreements on its part contained herein shall be absolute and
unconditional, irrespective of any defense or any rights of set-off, recoupment
or counterclaim it might otherwise have against the Authority, and during the
term of this Agreement, the Borrower shall pay all payments required to be made
on account of the loan (which payments shall be net of any other obligations of
the Borrower) as prescribed in Section 4.2 and all other payments required
hereunder, free of any deductions and without abatement, diminution or set-off.
Until such time as the principal of, premium, if any, sinking fund installments,
if any, and interest on, the Bonds shall have been fully paid, or provision for
the payment thereof shall have been made as required by the Indenture, the
Borrower (i) will not suspend or discontinue any payments provided for in
Section 4.2 hereof; (ii) will perform and observe all of its other covenants
contained in this Agreement; and (iii) except as provided in Article VIII
hereof, will not terminate this Agreement for any cause, including, without
limitation, the occurrence of any act or circumstances that may constitute
failure of consideration, destruction of or damage to all or a portion of those
facilities or equipment comprising the Project, commercial frustration of
purpose, any change in the tax or other laws of the United States of America or
of the State of California or any political subdivision of either of these, or
any failure of the Authority or the Trustee to perform and observe any covenant,
whether express or implied, or any duty, liability or obligation arising out of
or connected with this Agreement or the Indenture, except to the extent
permitted by this Agreement.
SECTION 4.4. ASSIGNMENT OF AUTHORITY'S RIGHTS. As security for
the payment of the Bonds, the Authority will assign to the Trustee the
Authority's rights under this Agreement, including the right to receive payments
hereunder (except the right of the Authority to receive certain payments, if
any, with respect to expenses and indemnification, or to enforce its rights
under Sections 4.2(c), 4.2(d), 7.3, 9.2 and 9.3 hereof and its rights of
indemnification and consent), and the Authority hereby directs the Borrower to
make the payments required hereunder (except such payments for expenses and
indemnification) directly to the Trustee. The Borrower hereby assents to such
assignment and agrees to make payments directly to the Trustee without defense
or set-off by reason of any dispute between the Borrower
15
and the Authority or the Trustee.
SECTION 4.5. AMOUNTS REMAINING IN FUNDS. It is agreed by the
parties hereto that after payment in full of (i) the Bonds, or after provision
for such payment shall have been made as provided in the Indenture, (ii) the
fees, charges and expenses of the Trustee and paying agents in accordance with
the Indenture, (iii) all other amounts required to be paid under this Agreement
and the Indenture, and (iv) any amounts owed to the Bank by the Borrower under
the Reimbursement Agreement, any amounts remaining in any fund held by the
Trustee under the Indenture (excepting the Rebate Fund) shall be paid as
provided in Section 10.01 of the Indenture.
ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
SECTION 5.1. RIGHT OF ACCESS TO THE PROJECT. The Borrower agrees
that during the term of this Agreement the Authority, the Trustee, the Bank and
the duly authorized agents of any of them shall have the right at all reasonable
times during normal business hours to enter upon the site of the Project to
examine and inspect the Project; provided, however, that reasonable notice shall
be given to the Borrower prior to such examination or inspection. The rights of
access hereby reserved to the Authority, the Trustee and the Bank may be
exercised only after such agent shall have executed release of liability and
secrecy agreements if requested by the Borrower in the form then currently used
by the Borrower, and nothing contained in this Section or in any other provision
of this Agreement shall be construed to entitle the Authority, the Trustee or
the Bank to any information or inspection involving the confidential knowledge,
expertise or know-how of the Borrower.
SECTION 5.2. THE BORROWER'S MAINTENANCE OF ITS EXISTENCE;
ASSIGNMENTS. (a) To the extent permitted by law and its articles of
incorporation, the Borrower covenants and agrees that during the term of this
Agreement it will maintain its existence as a corporation, will continue to
maintain its status as a corporation in good standing in the State of
California, will not dissolve, sell or otherwise dispose of all or substantially
all of its assets and will not combine or consolidate with or merge into another
entity or permit one or more other entities (except for a wholly owned
subsidiary of the Borrower, an entity of which the Borrower is a wholly owned
subsidiary, or an entity wholly owned by the entity of which the Borrower is a
wholly owned subsidiary) to consolidate with or merge into it; provided,
however, that if the Borrower has obtained the prior written consent of the
Authority and the Bank, the Borrower may so combine, consolidate with or merge
into another entity, or permit one or more other entities to consolidate with or
merge into it, or sell or otherwise transfer to another entity all or
substantially all of its assets as an entirety and thereafter dissolve. The
consent of the Authority (which shall not be unreasonably withheld) shall be
given within 30 days after the Authority receives satisfactory evidence that:
(i) the surviving, resulting, or transferee person or entity, as the case may
be, assumes and agrees in writing to pay and perform all of the obligations of
the Borrower hereunder, (ii) the surviving, resulting, or transferee person or
entity, as the case may be, qualifies to do business in the State of California,
(iii) the existing Letter of Credit will remain in full force and effect, and
(iv) the credit rating on the Bonds, as
16
determined by any Rating Agency then rating the Bonds, shall be no lower than
the rating level of the Bonds immediately prior to the effective date of such
consolidation, merger, sale or transfer. The Authority shall also have received
an Opinion of Bond Counsel to the effect that the resulting change in ownership
of the Borrower will not cause interest on the Bonds to be included in gross
income for federal income tax purposes. If the Authority does not act within 30
days after such written evidence is received, such consent shall be deemed to be
given.
If the outcome of the transaction would have a result other than
the surviving, resulting or transferee person or entity owning any of the assets
financed with proceeds of the Bonds and assuming all of the obligations of the
Borrower to be performed hereunder, the Borrower shall deliver to the Trustee
and the Authority prior to the consummation of the transaction an Opinion of
Bond Counsel stating to the effect that the resulting change in ownership of the
assets financed with proceeds of the Bonds will not cause interest on the Bonds
to be included in gross income for federal income tax purposes.
Within 10 days after the consummation of the merger or other
transaction, the Borrower shall provide the Authority and the Trustee with
counterpart copies of the merger instruments, or other documents constituting
the transaction, including (A) copies of the instruments of assumption referred
to in (i) above, (B) evidence of qualification as referred to in (ii) above, (C)
evidence demonstrating compliance with the requirements of clauses (iii) and
(iv) above, and (D) an officer's certificate stating that the requirements of
Section 5.2(a) have been met. The Borrower shall give the Authority at least 30
days' written notice prior to the effective date of any merger or other
transaction described above, together with drafts of the documents of assumption
and officer's certificate as required herein. The Borrower agrees to provide
such other information as the Authority may reasonably request in order to
assure compliance with this Section 5.2(a).
Notwithstanding any other provisions of this Section 5.2(a), the
Borrower need not comply with any of the provisions of Section 5.2(a) above if,
at the time of such merger, combination, sale of assets, dissolution or
reorganization, the Bonds will be defeased as provided in Article X of the
Indenture.
(b) The rights and obligations of the Borrower under this
Agreement may be assigned by the Borrower to any person in whole or in part,
subject, however, to each of the following conditions:
(i) No assignment other than pursuant to subsection (a) of
this Section shall relieve the Borrower from primary liability for any
of its obligations hereunder, and in the event of any assignment not
pursuant to subsection (a) of this Section the Borrower shall continue
to remain primarily liable for the payments specified in Section 4.2
hereof and for performance and observance of the other agreements herein
provided to be performed and observed by it.
(ii) Any assignment from the Borrower shall retain for the
Borrower such rights and interests as will permit it to perform its
obligations under this Agreement, and any assignee from the Borrower
shall assume in writing the obligations of the
17
Borrower hereunder to the extent of the interest assigned.
(iii) The Borrower shall give the Authority and the Bank
30 days' prior written notice of any assignment other than pursuant to
subsection(a), and shall, within 30 days after delivery thereof, furnish
or cause to be furnished to the Authority, the Trustee and the Bank a
true and complete copy of each such assignment together with an
instrument of assumption and an Opinion of Counsel satisfactory to the
Authority that the provisions of this Section 5.2(b) have been complied
with.
If a merger, consolidation, sale or other transfer is effected as
provided in this Section, all provisions of this Section shall continue in full
force and effect and no further merger, consolidation, sale or transfer shall be
effected except in accordance with the provisions of this Section.
SECTION 5.3. RECORDS AND FINANCIAL STATEMENTS OF BORROWER. (a)
The Borrower covenants and agrees at all times to keep, or cause to be kept,
proper books of record and account, prepared in accordance with generally
accepted accounting principles, in which complete and accurate entries shall be
made of all transactions of or in relation to the business, properties and
operations of the Borrower. Such books of record and account shall be available
for inspection by the Authority, the Bank or the Trustee at reasonable hours,
under reasonable circumstances and after reasonable prior notice to the
Borrower.
(b) The Borrower further covenants and agrees to furnish to the
Authority, the Remarketing Agent and the Trustee, within 120 days after the end
of each Fiscal Year, (i) a Certificate of an Authorized Representative of the
Borrower stating that its financial statements have been completed and that no
event which constitutes a Loan Default Event or which with the giving of notice
or the passage of time or both would constitute a Loan Default Event has
occurred and is continuing as of the end of such Fiscal Year, or specifying the
nature of such event and the actions taken and proposed to be taken by the
Borrower to cure such default, and (ii) copies of the consolidated financial
statements of Waste Connections, Inc. and its subsidiaries in such form as are
required to be provided to the Bank.
SECTION 5.4. INSURANCE. The Borrower agrees to insure the Project
or cause the Project to be insured during the term of this Agreement for such
amounts and for such occurrences as are customary for similar facilities within
the State of California, or as may be required by the Bank pursuant to the
Reimbursement Agreement, by means of policies issued by reputable insurance
companies qualified to do business in the State of California. The Borrower
agrees to deliver, upon request, to the Authority, the Bank and the Trustee
memorandum copies of the insurance policies or certificates of insurance
covering the Project, and the certification by an insurance consultant that the
insurance on the Project meets the above requirements.
SECTION 5.5. MAINTENANCE AND REPAIR; TAXES; UTILITY AND OTHER
CHARGES. The Borrower agrees to maintain the Project, or cause the Project to be
maintained, during the term of this Agreement (i) in as reasonably safe
condition as its operations shall permit and (ii) in good repair and in good
operating condition, ordinary wear and tear
18
excepted, making from time to time all necessary repairs thereto and renewals
and replacements thereof.
The Borrower agrees to pay or cause to be paid during the term of
this Agreement all taxes, governmental charges of any kind lawfully assessed or
levied upon the Project or any part thereof, including any taxes levied against
any portion of the Project which, if not paid, will become a charge on the
receipts from the Project prior to or on a parity with the charge thereon and
the pledge or assignment thereof to be created therefrom or under this
Agreement, all utility and other charges incurred in the operation, maintenance,
use, occupancy and upkeep of any portion of the Project and all assessments and
charges lawfully made by any governmental body for public improvements that may
be secured by a lien on the Project, provided that with respect to special
assessments or other governmental charges that may lawfully be paid in
installments over a period of years, the Borrower shall be obligated to pay only
such installments as are required to be paid during the term of this Agreement.
The Borrower may, at the Borrower's expense and in the Borrower's name, in good
faith, contest any such taxes, assessments and other charges and, in the event
of any such contest, may permit the taxes, assessments or other charges so
contested to remain unpaid during that period of such contest and any appeal
therefrom unless by such nonpayment the Project or any part thereof will be
subject to loss or forfeiture.
SECTION 5.6. QUALIFICATION IN CALIFORNIA. The Borrower agrees
that throughout the term of this Agreement it, or any successor or assignee as
permitted by Section 5.2, will be qualified to do business in the State of
California.
SECTION 5.7. ALTERNATE CREDIT FACILITY. The Borrower may deposit
with the Trustee an Alternate Credit Facility, in lieu of keeping the Letter of
Credit in place as required by Section 5.8 hereof, at least 60 days before the
expiration date of any existing Letter of Credit.
Upon deposit with the Trustee, the Alternate Credit Facility must
meet the following conditions:
(a) the Alternate Credit Facility must be approved by the
Authority or any successors and assigns;
(b) provisions of the Alternate Credit Facility must be
acceptable to the Trustee;
(c) the term of the Alternate Credit Facility must extend at
least one year or to at least the first date on which the Bonds are
subject to redemption pursuant to the Indenture, whichever is longer;
and
(d) the Alternate Credit Facility must be in an amount
sufficient to pay principal of, interest, Purchase Price and any
redemption premium payable upon optional redemption of the Bonds.
Not less than 30 days prior to the delivery of an Alternate
Credit Facility, the
19
Borrower shall (i) deliver to the Trustee a commitment for the delivery of such
Alternate Credit Facility, (ii) inform the Trustee of the date on which the
Alternate Credit Facility will become effective, which date shall not be less
than 5 calendar days prior to the stated expiration date of the existing Credit
Facility and (iii) inform the Trustee of the rating expected to apply to the
1998A Bonds after the Alternate Credit Facility is delivered. On or prior to the
date of the delivery of an Alternate Credit Facility to the Trustee, the
Borrower shall cause to be furnished to the Trustee (i) an opinion of Bond
Counsel to the effect that the delivery of such Alternate Credit Facility to the
Trustee is authorized under the Indenture and complies with the terms hereof and
will not adversely affect the Tax-exempt status of the Bonds, (ii) an opinion to
the effect that the Alternate Credit Facility is enforceable in accordance with
its terms, except to the extent that enforceability thereof may be limited by
bankruptcy, reorganization or similar laws limiting the enforceability of
creditors' rights generally and except that no opinion need be expressed as to
the availability of any discretionary equitable rights; and (iii) written
evidence from a Rating Agency to the effect that such rating agency has review
the proposed Alternate Credit Facility and (A) that the substitution of the
proposed Alternate Credit Facility for the Letter of Credit will not, by itself,
result in a reduction or withdrawal of its rating of the Bonds, from the rating
which then prevails, unless on the effective date of such Alternate Credit
Facility the Holders of the Bonds are subject to mandatory tender pursuant to
Section 4.06 of the Indenture, in which case, subject to clause (B) following,
the rating of the Bonds may be reduced, and (B) if the Bonds then have a
long-term rating, that the Bonds will be rated ▇▇▇▇▇'▇ "A1" or Fitch "A+" (or
equivalent) or higher or, if the Bonds only have a short-term rating, will be in
the highest short-term rating category.
SECTION 5.8. LETTER OF CREDIT. (a) Subject to Section 5.7 hereof
and except as may be permitted under the Indenture, the Borrower agrees that
throughout the term of this Agreement it, or any successor or assignee as
permitted by Section 5.2 hereof, will maintain or cause to be maintained the
Letter of Credit or an Alternate Letter of Credit. At any time the Borrower may,
at its option, provide for the delivery to the Trustee of an Alternate Letter of
Credit and the Borrower shall, in any event, cause to be delivered an Alternate
Letter of Credit at least 60 days before the expiration date of any existing
Letter of Credit, unless otherwise permitted by the Indenture, or any existing
Alternate Credit Facility. An Alternate Letter of Credit shall be an irrevocable
letter of credit or other irrevocable credit facility (including, if applicable,
a confirming letter of credit), issued by a commercial bank or other financial
institution, the terms of which shall in all material respects be the same as
the Letter of Credit; provided, that the expiration date of such Alternate
Letter of Credit shall be a date not earlier than one year from its date of
issuance, subject to earlier termination upon payment of all Bonds in full or
provision for such payment in accordance with Article X of the Indenture. Not
less than 30 days prior to the delivery of an Alternate Letter of Credit, the
Borrower shall (i) deliver to the Trustee a commitment for the delivery of such
Alternate Letter of Credit, (ii) inform the Trustee of the date on which the
Alternate Letter of Credit will become effective, which date shall not be less
than 5 calendar days prior to the stated expiration date of the existing Letter
of Credit and (iii) inform the Trustee of the rating expected to apply to the
1998A Bonds after the Alternate Letter of Credit is delivered. On or prior to
the date of the delivery of an Alternate Letter of Credit to the Trustee, the
Borrower shall cause to be furnished to the Trustee (i) an opinion of Bond
Counsel stating that the delivery of such Alternate Letter of Credit to the
Trustee is authorized under the Indenture and complies with the terms hereof and
will not adversely affect
20
the Tax-exempt status of the Bonds, (ii) an opinion that such Alternate Letter
of Credit is enforceable in accordance with its terms (except to the extent that
the enforceability thereof may be limited by bankruptcy, reorganization or
similar laws limiting the enforceability of creditors' rights generally and
except that no opinion need be expressed as to the availability of any
discretionary equitable remedies), and (iii) written evidence from a Rating
Agency to the effect that such rating agency has reviewed the proposed Alternate
Letter of Credit and (A) that the substitution of the proposed Alternate Letter
of Credit for the Letter of Credit will not, by itself, result in a reduction or
withdrawal of its rating of the Bonds from the rating which then prevails,
unless on the effective date of such Alternate Letter of Credit the Holders of
the Bonds are subject to mandatory tender pursuant to Section 4.06 of the
Indenture, in which case, subject to clause (B) following, the rating of the
Bonds may be reduced, and (B) if the Bonds then have a long-term rating, that
the Bonds will be rated ▇▇▇▇▇'▇ "A1" or Fitch "A+" (or equivalent) or higher or,
if the Bonds only have a short-term rating, will be in the highest short-term
rating category.
(b) The Borrower shall provide a written statement to the Trustee
(with copies to the Authority) on or before June 1 of each year indicating the
status of the extension of the term of the Letter of Credit. If the Letter of
Credit provides for automatic annual extensions, the Borrower shall notify the
Trustee either (i) that the term of the Letter of Credit has been automatically
extended pursuant to its terms, or (ii) that the Letter of Credit Bank has given
written notice of a decision not to extend the term of the Letter of Credit. If
the Letter of Credit does not provide for automatic extensions, the Borrower
shall notify the Trustee whether or not the Bank has given written approval for
an extension of the term of the Letter of Credit.
SECTION 5.9. GENERAL TAX COVENANTS; REBATE. It is the intention
of the parties hereto that interest on the Bonds shall be and remain Tax-exempt,
and to that end the Borrower covenants to comply with all requirements in the
Tax Certificate, in this Section and in Section 5.10 which are for the benefit
of the Trustee and each and every Holder of the Bonds.
The Borrower shall calculate, or cause to be calculated, its
rebate liability at such times as are required by Section 148(f) of the Code and
any temporary, proposed or final Regulations as may be applicable to the Bonds
from time to time. The Borrower shall provide to the Trustee a copy of each
calculation of rebate liability prepared by or on behalf of the Borrower, which
documentation shall be made available to the Authority upon request.
SECTION 5.10. SPECIAL ARBITRAGE CERTIFICATIONS. The Authority
hereby certifies to the Borrower (i) that it has not been notified of any
listing or proposed listing of it by the Internal Revenue Service as a bond
issuer whose arbitrage certifications may not be relied upon and (ii) that
issuance of the Bonds will not violate any provisions of Section 103, or of
Section 148 of the Code or Treasury Regulations issued under those Sections of
the Code, such that the Bonds are not Tax-exempt. To that end, the Borrower
acknowledges that it has read Sections 5.06 and 6.06 of the Indenture and that
it will comply with the requirements of those sections as if they were set forth
in full in this Agreement.
SECTION 5.11. NOTICE AND CERTIFICATES TO TRUSTEE. The
21
Borrower hereby agrees to provide the Trustee and the Bank with the following:
(a) On or before June 15 and December 15 of each year any of the
Bonds are Outstanding, a certificate of an Authorized Representative of
the Borrower that: (i) all payments required under this Agreement have
been made and (ii) any applicable third party credit support will
continue in full force during the succeeding twelve months, or
explaining why not;
(b) Within 120 days of the end of the fiscal year of the
Borrower, (i) a certificate of the Borrower to the effect that all
payments have been made under this Agreement and that, to the best of
its knowledge, there exists no event of default or unmatured default and
(ii) the audited consolidated financial statements of Waste Connections,
Inc. and its subsidiaries;
(c) Promptly upon knowledge of an Event of Default, notice of
such Event of Default, such notice to include a description of the
nature of such event and what steps are being taken to remedy such Event
of Default; and
(d) On or before December 20 of each year during which any of
the Bonds are Outstanding, a written disclosure of any significant
change known to the Borrower that occurs which would adversely impact
the Trustee's ability to perform its duties under the Indenture, or of
any conflicts which may result because of other business dealings
between the Trustee and the Borrower.
SECTION 5.12. FINANCING AND CONTINUATION STATEMENTS. The Borrower
hereby agrees to file all financing and continuation statements required to be
filed, if any, relating to the Bonds and their security.
SECTION 5.13. CHANGE IN INTEREST RATES. The Authority
acknowledges the right of the Borrower to adjust the Interest Rate Period for
any Series of the Bonds from time to time under the terms and conditions of the
Indenture.
SECTION 5.14. CONTINUING DISCLOSURE. The Borrower hereby
covenants and agrees, upon the adjustment to a Term Interest Rate Period with a
duration of one year or greater with respect to any Series of the Bonds pursuant
to Section 2.03D(II) of the Indenture and the remarketing of such Bonds pursuant
to Section 4.07 of the Indenture, to comply with the continuing disclosure
requirements promulgated under S.E.C. Rule 15c2-12, as it may from time to time
hereafter be amended or supplemented. Notwithstanding any other provision of
this Loan Agreement, failure of the Borrower to comply with the requirements of
S.E.C. Rule 15c2-12, as it may from time to time hereafter be amended or
supplemented, shall not be considered a Loan Default Event; however, the Trustee
at the written request of the Remarketing Agent or the Holders of at least 25%
aggregate principal amount of Outstanding Bonds, shall, but only to the extent
indemnified to its satisfaction from and against any cost, liability or expense
of any kind whatsoever related thereto, including, without limitation, fees and
expenses of its attorneys and advisors and additional fees and expenses of the
Trustee, or any Bondholder or beneficial owner of the Bonds may take such
actions as may be necessary and
22
appropriate, including seeking mandate or specific performance by court order,
to cause the Borrower to comply with its obligations pursuant to this Section
5.14.
ARTICLE VI
DAMAGE, DESTRUCTION AND CONDEMNATION;
USE OF PROCEEDS
SECTION 6.1. OBLIGATION TO CONTINUE PAYMENTS. If prior to full
payment of the Bonds (or provision for payment thereof in accordance with the
provisions of the Indenture) (i) the Project or any portion thereof is destroyed
(in whole or in part) or is damaged by fire or other casualty, or (ii) title to,
or the temporary use of, the Project or any portion thereof shall be taken under
the exercise of the power of eminent domain by any governmental body or by any
person, firm or corporation acting under governmental authority, the Borrower
shall nevertheless be obligated to continue to pay the amounts specified in
Article IV hereof, to the extent not prepaid in accordance with Article VIII
hereof.
SECTION 6.2. APPLICATION OF NET PROCEEDS. The Borrower shall be
entitled to the Net Proceeds, if any, of any insurance or condemnation awards
resulting from the damage, destruction or condemnation of the Project or any
portion thereof. All Net Proceeds shall be deposited by the Borrower in an
escrow account and shall be applied, with the consent of the Bank and by written
notice to the Authority and the Trustee, in one or more of the following ways at
the election of the Borrower:
(a) The prompt repair, restoration, relocation,
modification or improvement of the stage of completion of construction
of the damaged, destroyed or condemned portion of the Project to enable
such portion of the Project to accomplish at least the same function as
such portion of the Project was designed to accomplish prior to such
damage or destruction or exercise of such power of eminent domain. Any
balance of the Net Proceeds remaining after such work has been completed
shall be deposited in the Revenue Fund to be applied to the payment of
principal of and premium, if any, and interest on the Bonds, or, if the
Bonds have been fully paid (or provision for payment thereof has been
made in accordance with the provisions of the Indenture), any balance
remaining in the Revenue Fund shall be paid as provided in Section 10.01
of the Indenture.
(b) Prepayment of all or a portion of the amounts payable
hereunder, in accordance with Article VIII hereof, and redemption of
Bonds; provided that no part of the Net Proceeds may be applied for such
purpose unless (1) all of the amounts payable under this Agreement are
so prepaid and all Outstanding Bonds are to be redeemed in accordance
with the Indenture, or (2) in the event that less than all of the
amounts payable hereunder are so prepaid, the Borrower shall furnish to
the Authority and the Trustee a certificate of the Authorized
Representative acceptable to the Authority and the Trustee stating (i)
that the property forming part of the portion of the Project that was
damaged or destroyed by such casualty or was taken by such condemnation
proceedings is not essential to the Borrower's use or possession of such
portion of the Project or (ii) that
23
such part of the portion of the Project theretofore completed has been
repaired, replaced, restored, relocated, modified or improved to enable
such portion of the Project to accomplish at least the same function as
such portion of the Project was designed to accomplish prior to such
damage or destruction or the taking by such condemnation proceedings.
SECTION 6.3. INSUFFICIENCY OF NET PROCEEDS. If the Project or a
portion thereof is to be repaired, restored, relocated, modified or improved
pursuant to Section 6.2 hereof, and if the Net Proceeds are insufficient to pay
in full the cost of such repair, restoration, relocation, modification or
improvement, the Borrower will nonetheless complete the work or cause the work
to be completed and will pay or cause to be paid any cost in excess of the
amount of the Net Proceeds held in escrow.
SECTION 6.4. DAMAGE TO OR CONDEMNATION OF OTHER PROPERTY. The
Borrower shall be entitled to the Net Proceeds of any insurance or condemnation
award or portion thereof made for damages to or takings of its property not
included in the Project.
ARTICLE VII
LOAN DEFAULT EVENTS AND REMEDIES
SECTION 7.1. LOAN DEFAULT EVENTS. Any one of the following which
occurs and continues shall constitute a Loan Default Event:
(a) failure of the Borrower to make any payment required by
Section 4.2(a) hereof when due; or
(b) failure of the Borrower to observe and perform any covenant,
condition or agreement on its part required to be observed or performed
by this Agreement other than as provided in (a), which continues for a
period of 30 days after written notice delivered to the Borrower and the
Bank, which notice shall specify such failure and request that it be
remedied, given to the Borrower and the Bank by the Authority or the
Trustee, unless the Authority and the Trustee shall agree in writing to
an extension of such time; provided, however, that if the failure stated
in the notice cannot be corrected within such period, the Authority and
the Trustee will not unreasonably withhold their consent to an extension
of such time if corrective action is instituted within such period and
diligently pursued until the default is corrected; or
(c) existence of an Event of Default under and as defined in
Section 7.01(a), (b) or (e) of the Indenture; or
(d) existence of an Event of Default under and as defined in
Section 7.01(c) of the Indenture.
The provisions of subsection (b) of this Section are subject to the
limitation that the
24
Borrower shall not be deemed in default if and so long as the Borrower is
unable to carry out its agreements hereunder by reason of strikes, lockouts or
other industrial disturbances; acts of public enemies; orders of any kind of the
government of the United States or of the State of California or any of their
departments, agencies, or officials, or any civil or military authority;
insurrections, riots, epidemics, landslides; lightning; earthquake; fire;
hurricanes; storms; floods; washouts; droughts; arrests; restraint of government
and people; civil disturbances; explosions; breakage or accident to machinery,
transmission pipes or canals; partial or entire failure of utilities; or any
other cause or event not reasonably within the control of the Borrower; it being
agreed that the settlement of strikes, lockouts and other industrial
disturbances shall be entirely within the discretion of the Borrower, and the
Borrower shall not be required to make settlement of strikes, lockouts and other
industrial disturbances by acceding to the demands of the opposing party or
parties when such course is, in the judgment of the Borrower, unfavorable to the
Borrower. This limitation shall not apply to any default under subsections (a),
(c) or (d) of this Section. Notwithstanding any other provision of this
Agreement to the contrary, so long as the Bank is not in default under the
Letter of Credit, the Trustee shall not without the prior written consent or
direction of the Bank exercise any remedies under the Agreement in the case of
any Loan Default Event described in subsections (a), (b) or (c) above; provided,
however, that no consent of the Bank shall be required with respect to the
enforcement of Section 4.2(c), 4.2(d), 7.3, 9.2 or 9.3 hereof. The Trustee may
exercise any and all remedies under the Indenture and the Agreement (except
acceleration) to collect any fees, expenses and indemnification from the
Borrower without obtaining the consent of the Bank.
SECTION 7.2. REMEDIES ON DEFAULT. Subject to Section 7.1 hereof,
whenever any Loan Default Event shall have occurred and shall be continuing,
(a) The Trustee, by written notice to the Authority, the
Borrower and the Bank, shall declare the unpaid balance of the loan
payable under Section 4.2(a) of this Agreement to be due and payable
immediately, provided that concurrently with or prior to such notice the
unpaid principal amount of the Bonds shall have been declared to be due
and payable under the Indenture. Upon any such declaration such amount
shall become and shall be immediately due and payable as determined in
accordance with Section 7.01 of the Indenture.
(b) The Trustee may have access to and may inspect,
examine and make copies of the books and records and any and all
accounts, data and federal income tax and other tax returns of the
Borrower; provided that the Trustee shall be obligated to protect the
confidentiality of such information to the extent provided by State and
federal law and prevent its disclosure to the public, except the
Authority.
(c) The Authority or the Trustee may take whatever action
at law or in equity as may be necessary or desirable to collect the
payments and other amounts then due and thereafter to become due or to
enforce performance and observance of any obligation, agreement or
covenant of the Borrower under this Agreement.
25
(d) The Trustee shall immediately draw upon the Letter of
Credit, if permitted by its terms and required by the terms of the
Indenture, and apply the amount so drawn in accordance with the
Indenture and may exercise any remedy available to it thereunder.
In case the Trustee or the Authority shall have proceeded to
enforce its rights under this Agreement and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Trustee or the Authority, then, and in every such case, the Borrower, the
Trustee and the Authority shall be restored respectively to their several
positions and rights hereunder, and all rights, remedies and powers of the
Borrower, the Trustee and the Authority shall continue as though no such action
had been taken.
The Borrower covenants that, in case a Loan Default Event shall
occur with respect to the payment of any Loan Repayment payable under Section
4.2(a) hereof, then, upon demand of the Trustee, the Borrower will pay to the
Trustee the whole amount that then shall have become due and payable under said
Section, with interest on the amount then overdue at the rate of seven percent
(7%) per annum, following a delinquency of 30 days or longer until such amount
has been paid or, if seven percent is greater than the rate then permitted by
law, at the greatest rate then permitted. Such overdue rate shall be in effect
following a delinquency of 30 days and shall remain in effect until such overdue
amount has been paid.
In case the Borrower shall fail forthwith to pay such amounts
upon such demand, the Trustee shall be entitled and empowered to institute any
action or proceeding at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Borrower
and collect in the manner provided by law the moneys adjudged or decreed to be
payable.
In case proceedings shall be pending for the bankruptcy or for
the reorganization of the Borrower under the federal bankruptcy laws or any
other applicable law, or in case a receiver or trustee shall have been appointed
for the property of the Borrower or in the case of any other similar judicial
proceedings relative to the Borrower, or the creditors or property of the
Borrower, then the Trustee shall be entitled and empowered, by intervention in
such proceedings or otherwise, to file and prove a claim or claims for the whole
amount owing and unpaid pursuant to this Agreement and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee allowed in
such judicial proceedings relative to the Borrower, its creditors or its
property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute such amounts as provided in
the Indenture after the deduction of its reasonable charges and expenses to the
extent permitted by the Indenture. Any receiver, assignee or trustee in
bankruptcy or reorganization is hereby authorized to make such payments to the
Trustee, and to pay to the Trustee any amount due it for reasonable compensation
and expenses, including reasonable expenses and fees of counsel incurred by it
up to the date of such distribution.
SECTION 7.3. AGREEMENT TO PAY ATTORNEYS' FEES AND
26
EXPENSES. In the event the Borrower should default under any of the provisions
of this Agreement and the Authority or the Trustee should employ attorneys or
incur other expenses for the collection of the payments due under this Agreement
or the enforcement of performance or observance of any obligation or agreement
on the part of the Borrower herein contained, the Borrower agrees to pay to the
Authority or the Trustee the reasonable fees of such attorneys and such other
reasonable expenses so incurred by the Authority or the Trustee.
SECTION 7.4. NO REMEDY EXCLUSIVE. No remedy herein conferred upon
or reserved to the Authority or the Trustee is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Agreement or now or hereafter existing at law or in equity or by statute. No
delay or omission to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as often as may
be deemed expedient. In order to entitle the Authority or the Trustee to
exercise any remedy reserved to it in this Article, it shall not be necessary to
give any notice, other than such notice as may be herein expressly required.
Such rights and remedies as are given the Authority hereunder shall also extend
to the Trustee, and the Trustee and the Holders of the Bonds shall be deemed
third party beneficiaries of all covenants and agreements herein contained.
SECTION 7.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER. In the
event any agreement or covenant contained in this Agreement should be breached
by the Borrower and thereafter waived by the Authority or the Trustee, such
waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other breach hereunder.
ARTICLE VIII
PREPAYMENT
SECTION 8.1. REDEMPTION OF BONDS WITH PREPAYMENT MONEYS. By
virtue of the assignment of the rights of the Authority under this Agreement to
the Trustee as is provided in Section 4.4 hereof, the Borrower agrees to and
shall pay directly to the Trustee any amount permitted or required to be paid by
it under this Article VIII. The Trustee shall use the moneys so paid to it by
the Borrower to redeem the Bonds on the date set for such redemption pursuant to
Section 8.5 hereof. The Authority shall call Bonds for redemption as required by
Article IV of the Indenture or as requested by the Borrower pursuant to the
Indenture or this Agreement.
SECTION 8.2. OPTIONS TO PREPAY INSTALLMENTS. The Borrower shall
have the option to prepay the amounts payable under Section 4.2(a) hereof by
paying to the Trustee, for deposit in the Revenue Fund, the amount set forth in
Section 8.4 hereof, under the following circumstances:
(a) The Borrower may prepay all or any part of the Loan
Repayments under the circumstances described in Section 6.2 hereof, and
cause all or any part of the Bonds to be redeemed at the price and time
and under the conditions set forth in Section
27
4.01(5)(i) of the Indenture and in any Supplemental Indenture.
(b) The Borrower may prepay such amounts in whole, or in
part, and cause all of the Bonds to be redeemed at the price and time
and under the conditions set forth in Section 4.01(5)(ii) of the
Indenture.
(c) The Borrower shall also have the option to prepay all
or any part of the Loan Repayments and to cause all or any part of the
Bonds to be redeemed at the times and at the prices set forth in Section
4.01(6) or (7) of the Indenture and in any Supplemental Indenture and
subject to any additional requirements of the Reimbursement Agreement.
SECTION 8.3. MANDATORY PREPAYMENT. The Borrower shall have and
hereby accepts the obligation to prepay in whole the Loan Repayments required by
Section 4.2(a) of this Agreement, together with interest accrued, but unpaid,
thereon, to be used to redeem all or a part of the Outstanding Bonds under any
of the following circumstances:
(a) if and when as a result of any changes in the
Constitution of the United States of America or the California
Constitution or as a result of any legislative, judicial or
administrative action, this Agreement shall have become void or
unenforceable or impossible of performance in accordance with the
intention and purposes of the parties hereto, or shall have been
declared unlawful;
(b) if, due to the untruth or inaccuracy of any
representation or warranty made by the Borrower in this Agreement or in
connection with the offer and sale of the Bonds, or the breach of any
covenant or warranty of the Borrower contained in this Agreement or in
the Tax Certificate, interest on the Bonds, or any of them, is
determined not to be Tax-exempt to the Holders thereof (other than a
Holder who is a "substantial user" of the Project or a "related person"
within the meaning of Section 147(a) of the Code) by a final
administrative determination of the Internal Revenue Service or judicial
decision of a court of competent jurisdiction in a proceeding of which
the Borrower received notice and was afforded an opportunity to
participate in to the full extent permitted by law. A determination or
decision will be considered final for this purpose when all periods for
administrative and judicial review have expired; or
(c) if mandatory redemption is required by Section
4.01(2), 4.01(3) or 4.01(4) of the Indenture or by any Supplemental
Indenture.
The amount payable by the Borrower in the event of a prepayment required by this
Section shall be determined as set forth in Section 8.4 and shall be deposited
in the Revenue Fund.
SECTION 8.4. AMOUNT OF PREPAYMENT. In the case of a prepayment of
the entire amount due hereunder pursuant to Section 8.2 or 8.3 hereof, the
amount to be paid shall be a sum sufficient, together with other funds and the
yield on any securities deposited with the Trustee and available for such
purpose, to pay (1) the principal of all Bonds Outstanding on the redemption
date specified in the notice of redemption, plus interest accrued and to accrue
to
28
the payment or redemption date of the Bonds, plus premium, if any, pursuant to
the Indenture, (2) all reasonable and necessary fees and expenses of the
Authority, the Trustee and any paying agent accrued and to accrue through final
payment of the Bonds and (3) all other liabilities of the Borrower accrued and
to accrue under this Agreement.
In the case of partial prepayment of the Loan Repayments, the
amount payable shall be a sum sufficient, together with other funds deposited
with the Trustee and available for such purpose, to pay the principal amount of
and premium, if any, and accrued interest on the Bonds to be redeemed, as
provided in the Indenture, and to pay expenses of redemption of such Bonds. All
partial prepayments of the Loan Repayments shall be applied in inverse order of
the due dates thereof.
SECTION 8.5. NOTICE OF PREPAYMENT. To exercise an option granted
in or to perform an obligation required by this Article VIII, the Borrower shall
give written notice, at least 15 days prior to the last day by which the Trustee
is permitted to give notice of redemption pursuant to Section 4.03 of the
Indenture, to the Authority, the Bank, and the Trustee specifying the amount to
be prepaid and the date upon which any prepayment will be made. If the Borrower
fails to give such notice of a prepayment in connection with a mandatory
redemption under this Agreement, such notice may be given by the Authority, by
the Trustee or by any Holder or Holders of 10% or more in aggregate principal
amount of each Series of the Bonds Outstanding. The Authority and the Trustee,
at the request of the Borrower or any such Bondholder, shall forthwith take all
steps necessary under the applicable provisions of the Indenture (except that
the Authority shall not be required to make payment of any money required for
such redemption) to effect redemption of all or part of the then Outstanding
Bonds, as the case may be, on the earliest practicable date thereafter on which
such redemption may be made under applicable provisions of the Indenture.
ARTICLE IX
NON-LIABILITY OF AUTHORITY; EXPENSES; INDEMNIFICATION
SECTION 9.1. NON-LIABILITY OF AUTHORITY. The Authority shall not
be obligated to pay the principal of, or premium, if any, or interest on the
Bonds, except from Revenues. The Borrower hereby acknowledges that the
Authority's sole source of moneys to repay the Bonds will be provided by the
payments made by the Borrower pursuant to this Agreement, together with other
Revenues, including investment income on certain funds and accounts held by the
Trustee under the Indenture, and hereby agrees that if the payments to be made
hereunder shall ever prove insufficient to pay all principal of, and premium, if
any, and interest on the Bonds as the same shall become due (whether by
maturity, redemption, acceleration or otherwise), then upon notice from the
Trustee, the Borrower shall pay such amounts as are required from time to time
to prevent any deficiency or default in the payment of such principal, premium
or interest, including, but not limited to, any deficiency caused by acts,
omissions, nonfeasance or malfeasance on the part of the Trustee, the Borrower,
the Authority or any third party.
SECTION 9.2. EXPENSES. The Borrower covenants and agrees to pay
and
29
to indemnify the Authority and the Trustee against all costs and charges,
including reasonable fees and disbursements of attorneys, accountants,
consultants and other experts, incurred in good faith in connection with this
Agreement, the Bonds or the Indenture.
SECTION 9.3. INDEMNIFICATION. The Borrower releases the Authority
and the Trustee from, and covenants and agrees that neither the Authority nor
the Trustee shall be liable for, and covenants and agrees, to the extent
permitted by law, to indemnify and hold harmless the Authority and the Trustee
and their officers, employees and agents from and against, any and all losses,
claims, damages, liabilities or expenses, of every conceivable kind, character
and nature whatsoever arising out of, resulting from or in any way connected
with (1) the Project, or the conditions, occupancy, use, possession, conduct or
management of, or work done in or about, or from the planning, design,
acquisition, installation, rehabilitation or construction of the Project or any
part thereof; (2) the issuance of any Bonds or any certifications or
representations made in connection therewith and the carrying out of any of the
transactions contemplated by the Bonds and this Agreement; (3) the Trustee's
acceptance or administration of the trusts under the Indenture, or the exercise
or performance of any of its powers or duties under the Indenture or this
Agreement; (4) any untrue statement or alleged untrue statement of any material
fact or omission or alleged omission to state a material fact necessary to make
the statements made, in light of the circumstances under which they were made,
not misleading, in any official statement or other offering circular utilized by
the Authority or any underwriter or placement agent in connection with the sale
or remarketing of any Bonds; or (5) the cleanup of any hazardous materials or
toxic wastes from the Project or the authorization of payments of costs thereof;
provided that such indemnity shall not be required for damages that result from
negligence or willful misconduct on the part of the party seeking such
indemnity. The indemnity required by this Section shall be only to the extent
that any loss sustained by the Authority or the Trustee exceeds the Net Proceeds
the Authority or the Trustee receives from any insurance carried by the Borrower
with respect to the loss sustained. The Borrower further covenants and agrees,
to the extent permitted by law, to pay or to reimburse the Authority and the
Trustee and their officers, employees and agents for any and all costs,
reasonable attorneys fees and expenses, liabilities or other expenses incurred
in connection with investigating, defending against or otherwise in connection
with any such losses, claims, damages, liabilities, expenses or actions, except
to the extent that the same arise out of the negligence or willful misconduct of
the party claiming such payment or reimbursement. The provisions of this Section
shall survive any resignation or removal of the Trustee and the retirement of
the Bonds.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. NOTICES. All notices, certificates or other
communications shall be deemed sufficiently given on the second day following
the day on which the same have been mailed by certified mail, postage prepaid,
addressed to the Authority, the Borrower, the Trustee, or the Bank, as the case
may be, as follows:
30
To the Authority: California Pollution Control
Financing Authority
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Acting Executive Director
To the Borrower: Madera Disposal Systems, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Vice President, Operations
with a copy to: Waste Connections, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
To the Trustee: BNY Western Trust Company
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
To the Bank: BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Environmental Services Division
A duplicate copy of each notice, certificate or other communication given
hereunder by either the Authority or the Borrower to the other shall also be
given to the Trustee and the Bank. The Authority, the Borrower, the Trustee, and
the Bank may, by notice given hereunder, designate any different addresses to
which subsequent notices, certificates or other communications shall be sent.
SECTION 10.2. SEVERABILITY. If any provision of this Agreement
shall be held or deemed to be, or shall in fact be, illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable to
any extent whatever.
SECTION 10.3. EXECUTION OF COUNTERPARTS. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument;
provided, however, that for purposes of perfecting a security interest in this
Agreement by the Trustee and the Bank under Article 9 of the California Uniform
Commercial Code, only the counterpart delivered, pledged, and assigned to the
Trustee shall be deemed the original.
SECTION 10.4. AMENDMENTS, CHANGES AND MODIFICATIONS.
31
Except as otherwise provided in this Agreement or the Indenture, subsequent to
the initial issuance of Bonds and prior to their payment in full, or provision
for such payment having been made as provided in the Indenture, this Agreement
may not be effectively amended, changed, modified, altered or terminated without
the written consent of the Trustee given in accordance with Section 6.07(B) of
the Indenture, and the Bank.
SECTION 10.5. GOVERNING LAW; VENUE. This Agreement shall be
construed in accordance with and governed by the Constitution and laws of the
State applicable to contracts made and performed in the State. This Agreement
shall be enforceable in the State, and any action arising out of this Agreement
shall be filed and maintained in the Sacramento County Superior Court,
Sacramento, California, unless the Authority waives this requirement. In the
event of a dispute between the parties under this Agreement, the losing party in
such dispute shall pay all costs and expenses incurred by the prevailing party
in connection therewith, including, but not limited to, attorneys' fees.
SECTION 10.6. AUTHORIZED REPRESENTATIVE. Whenever under the
provisions of this Agreement the approval of the Borrower is required or the
Borrower is required to take some action at the request of the Authority, such
approval or such request shall be given on behalf of the Borrower by the
Authorized Representative, and the Authority and the Trustee shall be authorized
to act on any such approval or request and neither party hereto shall have any
complaint against the other or against the Trustee as a result of any such
action taken.
SECTION 10.7. TERM OF THE AGREEMENT. This Agreement shall be in
full force and effect from the date hereof and shall continue in effect as long
as any of the Bonds or the Letter of Credit is outstanding or the Trustee holds
any moneys under the Indenture, whichever is later. All representations and
certifications by the Borrower as to all matters affecting the Tax-exempt status
of the Bonds shall survive the termination of this Agreement.
SECTION 10.8. BINDING EFFECT. This Agreement shall inure to the
benefit of and shall be binding upon the Authority, the Borrower and their
respective successors and assigns; subject, however, to the limitations
contained in Section 5.2 hereof.
SECTION 10.9. SURVIVAL OF FEE OBLIGATION. The right of the
Authority, the Trustee, and the Bank to receive any fees or be reimbursed for
any expenses incurred pursuant to this Agreement, and the right of the Trustee
to be protected from any liability as provided in this Agreement, shall survive
the retirement of the Bonds.
SECTION 10.10. PURCHASE OF BONDS. The Borrower agrees that it
shall not purchase Bonds from the Remarketing Agent or otherwise, and that it
shall cause any Guarantor and any shareholder of the Borrower not to purchase
Bonds from the Remarketing Agent or otherwise.
SECTION 10.11. COMPLETE AGREEMENT. The parties agree that the
terms and conditions of this Agreement supersede those of all previous
agreements between the parties, and that this Agreement, together with the
documents referred to in this Agreement, contains the entire agreement between
the parties hereto.
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33
IN WITNESS WHEREOF, the California Pollution Control Financing
Authority has caused this Agreement to be executed in its name and its seal to
be hereunto affixed and attested by its duly authorized officers, and the
Borrower has caused this Agreement to be executed in its name all as of the date
first above written.
CALIFORNIA POLLUTION CONTROL
FINANCING AUTHORITY
By Chairman
By
-------------------------------------------
Deputy
[SEAL]
Attest:
-----------------------------------
Acting Executive Director
MADERA DISPOSAL SYSTEMS, INC.
By
----------------------------------
Authorized Representative
34
EXHIBIT A
DESCRIPTION OF THE PROJECT
The Project consists of the financing of the improvements to and
the expansion of a landfill operated by the Borrower and located in Madera
County, California.