<PAGE> 1
As filed with the Securities and Exchange Commission on March 20, 2000
Registration No. 333-_____
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM SB-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------
WCA SHILOH LANDFILL, L.L.C.
(Name of small business issuer in its charter)
DELAWARE 4953 76-0616242
(STATE OR JURISDICTION OF (PRIMARY STANDARD (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION
NUMBER)
ONE RIVERWAY, SUITE 14 223 ROCK QUARRY ROAD
HOUSTON, TEXAS 77056 TRAVELERS REST, SOUTH CAROLINA 29690
(713) 572-3800
(ADDRESS AND TELEPHONE NUMBER OF (ADDRESS OF PRINCIPAL PLACE OF BUSINESS
PRINCIPAL EXECUTIVE OFFICES) OR INTENDED PRINCIPAL PLACE OF BUSINESS)
J. EDWARD MENGER, GENERAL COUNSEL
WASTE CORPORATION OF AMERICA, INC.
ONE RIVERWAY, SUITE 1400
HOUSTON, TEXAS 77056
(713) 572-3800
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after the effective date of this registration statement.
----------------
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering.[ ]
-------------------------------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[ ]
------------------------------------------------------
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[ ]
-----------------------------------------------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
DOLLAR PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO BE MAXIMUM OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT REGISTRATION FEE
<S> <C> <C> <C>
Senior Secured Bonds $5,000,000 $5,000 $1,320
</TABLE>
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
Disclosure alternative used (check one): Alternative 1 ; Alternative 2 x
--- ---
<PAGE> 2
THIS PRELIMINARY PROSPECTUS IS DATED MARCH 20, 2000
SUBJECT TO COMPLETION
PROSPECTUS
WCA SHILOH LANDFILL, L.L.C.
A Delaware Limited Liability Company
One Riverway, Suite 1400
Houston, Texas 77056
$5,000,000 SENIOR SECURED BONDS
$5,000 per bond
----------------
SEE "BONDHOLDERS' RISKS" AT PAGE 2 FOR A
DISCUSSION OF CERTAIN FACTORS WHICH YOU SHOULD
CONSIDER BEFORE INVESTING IN THE BONDS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE BONDS OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THE BONDS UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Interest on the bonds is payable semi-annually on each April 1 and October
1 commencing October 1, 2000. The bonds are issuable as fully registered bonds
without coupons in denominations of $5,000 or integral multiples of $5,000.
<TABLE>
<CAPTION>
PRICE TO PUBLIC(1) DISCOUNTS AND COMMISSIONS(2) PROCEEDS TO ISSUER(3)
<S> <C> <C>
PER BOND $ $ $
TOTAL $ $ $
</TABLE>
- ---------------
(1) Plus accrued interest from April 1, 2000 of $____________.
(2) The bonds are being offered by the underwriter on a firm underwriting
basis. WCA Shiloh has agreed to indemnify the underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
described at page 24 under the heading "Plan of Distribution." There are no
formal arrangements or agreements with any other broker or dealer for the
placement of the bonds.
(3) Before deducting estimated offering expenses of $________________.
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: AS SOON AS PRACTICABLE AFTER
THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT.
THIS PROSPECTUS IS DATED APRIL ,2000.
-----
BLOUNT PARRISH & COMPANY
INCORPORATED
<PAGE> 3
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form SB-1 to register the bonds
offered by this prospectus with the Securities and Exchange Commission. This
prospectus is a part of that registration statement. As allowed by the
Securities and Exchange Commission's rules, though, this prospectus does not
contain all of the information you can find in the registration statement or the
exhibits to the registration statement. This prospectus summarizes some of the
documents that are exhibits to the registration statement, and you should refer
to the exhibits for a more complete description of the matters covered by those
documents.
As a result of the offering of bonds made by this prospectus, we will be
required to file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy reports, statements or other information filed by WCA Shiloh at the
Securities and Exchange Commission's public reference rooms at Judiciary Plaza,
450 Fifth Street, N.W., Washington, DC 20549, and at the following regional
offices of the Securities and Exchange Commission: Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade Center,
Suite 1300, New York, New York 10048. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the public reference
rooms. WCA Shiloh's filings are also available to the public from commercial
document retrieval services and at the internet website maintained by the
Securities and Exchange Commission at http:www.sec.gov.
PRIVATE SECURITIES LITIGATION REFORM ACT DISCLOSURE
Certain forward-looking information are contained in this prospectus in
reliance upon the "safe harbor" provision of the Private Securities Litigation
Reform Act of 1995, as set forth in Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange of 1934, as amended. Such
information includes, without limitation, discussions as to estimates,
expectations, beliefs, plans and objectives concerning our future financial and
operating performance. Such forward-looking information is subject to
assumptions and beliefs based on current information known by us and factors
that are subject to uncertainties, risks and other influences which are outside
our control and could yield actual results differing materially from those
anticipated.
DEALER PROSPECTUS DELIVERY OBLIGATION
Until ________, 2000, all dealers, if any, effecting transactions in the
bonds, whether or not participating in this offering, may be required to deliver
a prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
<PAGE> 4
PROSPECTUS SUMMARY
The information set forth below should be read in conjunction with and is
qualified in its entirety by the information and financial statements included
elsewhere in this prospectus.
WCA SHILOH AND PARENT COMPANY
WCA Shiloh is a member-managed Delaware limited liability company. It is
wholly-owned by Waste Corporation of America, Inc., which is sometimes referred
to as WCA.
WCA Shiloh's sole facility is the Shiloh construction and demolition, or
C&D, landfill. The landfill and related operating equipment are located north of
Greenville, South Carolina about a mile northeast of the town of Travelers Rest.
Our operating office near the landfill is located at 223 Rock Quarry Road,
Travelers Rest, South Carolina 29690.
Our headquarters are located at One Riverway, Suite 1400, Houston, Texas
77056. Our telephone number is 713-572-3800.
SUMMARY FINANCIAL AND OPERATING INFORMATION
(IN THOUSANDS)
<TABLE>
<CAPTION>
PREDECESSOR WCA SHILOH
--------------------- ------------------------
For the Period For the Period
January 1, 1999 September 1, 1999
through through
August 31, 1999 December 31, 1999
--------------------- ------------------------
STATEMENT OF OPERATIONS DATA:
<S> <C> <C>
Revenue $ 521 $ 384
Cost of services 224 92
Depreciation and amortization 40 45
--------------------- ------------------------
Operating income 257 247
Interest expense 44 161
--------------------- ------------------------
Income before income taxes 213 86
Provision for income taxes -- 21
--------------------- ------------------------
Net income $ 213 $ 65
===================== ========================
OTHER DATA:
Net cash provided by operating activities $ 218 $ 186
Net cash used by investing activities (28) (4,226)
Net cash provided (used) by financing activities (199) 4,086
EBITDA 297 292
EBITDA margin 57% 76%
BALANCE SHEET DATA: AS OF DECEMBER 31, 1999
Cash ----------------------------
Working capital (deficit) $ 46
Property and equipment, net (88)
Total assets 4,292
Long-term debt, net of current maturities 4,454
Total member's equity 4,053
151
</TABLE>
<PAGE> 5
BONDHOLDERS' RISKS
You should carefully consider the following risk factors, in addition to the
other information in this prospectus prior to making an investment decision on
the bonds.
WCA Shiloh's financial success depends on the continued financial viability
of the Shiloh landfill. Many of the bondholders' risks set forth below relate to
general business risks associated with ownership and operation of a construction
and demolition debris landfill.
LIFE OF LANDFILL. The bonds are scheduled to mature on April 1, 2020, and
are subject to mandatory redemption by sinking fund from April 1, 2001 through
April 1, 2020. At the Shiloh landfill's rate of accepting waste during the
fourth quarter of 1999, and assuming it continues to receive a relatively high
proportion of compact, heavy waste (e.g., dirt, concrete and rocks), the
landfill will have available airspace under its existing permit throughout the
life of the bonds. However, if the rate of accepting waste is immediately
increased to a level equal to the annual volume cap, the landfill will have
depleted its available airspace under its existing permit in the year 2011. As a
result, unless the landfill's permit is amended to allow for expanded
operations, it could be filled and closed prior to the scheduled maturity of the
bonds.
PERMITTING. The future expansion of the Shiloh landfill depends upon our
ability to obtain appropriate permits (and modifications of existing permits)
from governmental entities, including the South Carolina Department of Health
and Environmental Control. During the second quarter of this year we plan to
submit an application to amend our operating permit. If granted, the expansion
permit would increase our permitted capacity by approximately 75%. We consider
pursuing landfill expansion permits to be an ongoing and more-or-less routine
part of the landfill business. We know of no reason why WCA Shiloh would not
obtain this expansion permit so long as it remains in compliance with various
regulatory requirements. However, as we discuss below, the South Carolina
Department of Health and Environmental Control, our permitting agency, has
proposed new regulations governing the granting of new and expansion landfill
permits. For this reason and others, we cannot be sure that we will in fact be
able to obtain the expansion permit we will apply for. At current disposal (or
"tipping") fees, if we are not able to expand the existing permitted area of the
landfill, we will not be able to repay the bonds in full.
The South Carolina Department of Health and Environmental Control is
attempting to amend its regulation governing its granting of original permits
and expansion permits for solid waste disposal facilities (including C&D
landfills). Under the proposed rules, no permit to construct a new solid waste
disposal facility or to expand an existing solid waste disposal facility will be
issued until the applicant has demonstrated to the Department a need for the new
or expanded facilities, taking into account waste generated in the jurisdiction
subject to a county or regional solid waste management plan adopted under
applicable South Carolina law. The proposed amendment further provides that
where there are at least two commercial disposal facilities under separate
ownership within the planning area that meet the disposal needs for the area, no
new disposal capacity will be permitted. The proposed regulation also provides
that with regard to demonstration-of-need, any solid waste disposal facility
existing on the effective date of the regulation that exhausts its capacity will
be allowed to apply to the Department for a permit to either construct a new
solid waste disposal facility at the existing landfill's authorized annual rate
of disposal, or expand the volume of the existing landfill.
The proposed regulation has been discussed at a public hearing conducted on
February 10, 2000. The proposed regulation is currently before the legislature,
which has the power to amend or modify it prior to approval. As a result, we are
not in a position to predict whether the proposed regulation will be adopted in
its current form or any other form, or what its impact on our operations will be
if it is adopted.
The currently proposed regulation is similar to regulations in effect in
other jurisdictions that have not significantly impaired our ability to receive
expansion permits for C&D landfills. In fact, since the proposed regulation may
limit the establishment of new landfills, it might have the effect of
restricting competition in our market area. However, we cannot be sure that the
proposed regulation, in whatever form it may be adopted, will not interfere with
our ability to obtain future expansion permits.
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<PAGE> 6
RISKS INHERENT IN BUSINESS. WCA Shiloh is subject to all of the risks
inherent in the ownership and operation of a construction and demolition
landfill, including, among other things, dependence on the level of construction
activity in the Greenville-Spartanburg, South Carolina market area, competition,
uncertainties as to our ability to obtain expansion permits to extend the
capacity and operating life of the Shiloh landfill, and limited access to
capital that may be needed for future expansions. For example, the economy of
our Greenville-Spartanburg market has been strong during the life of the Shiloh
landfill to date, and construction and demolition activity in the area has been
steady. Any significant decrease in construction activity would likely result in
decreased rates of utilization of our landfill and decreased average tipping
fees for wastes that are disposed of at the landfill. For these reasons and
others, there can be no assurance that WCA Shiloh will have sufficient cash to
repay the bonds through maturity.
COMPETITION. WCA Shiloh operates within the highly competitive waste
disposal industry. We face competition from several national waste disposal
companies and numerous regional and local entities of various sizes and
competitive resources (see "The Shiloh Landfill--Competition"). Several of these
competitors are larger and have substantially greater financial and other
resources than WCA Shiloh and are well entrenched in the Greenville-Spartanburg,
South Carolina market. WCA Shiloh also competes with counties and municipalities
that maintain their own waste collection or disposal operations. These counties
and municipalities may have financial advantages through their access to tax
revenue and their ability to mandate the disposal of waste collected within the
jurisdiction at the municipal facility. Competition may also be affected by the
increasing national emphasis on recycling, composting, incineration and other
waste reduction programs which could reduce the volume of waste disposed in
landfills.
ENVIRONMENTAL RISKS AND REGULATIONS. WCA Shiloh is subject to extensive and
evolving environmental laws and regulations. These regulations are administered
by the Environmental Protection Agency (the "EPA") and various other federal,
state and local environmental, zoning, health and safety agencies, many of which
periodically examine WCA Shiloh's operations to monitor compliance with
applicable laws and regulations. Our management believes there will be continued
change in regulation and legislation related to the waste management industry,
and WCA Shiloh will attempt to anticipate such future regulatory requirements to
ensure compliance.
Our landfill operation subjects us to operational, monitoring, site
maintenance, closure and post-closure obligations that could give rise to
increased costs for monitoring and corrective measures. Government authorities
have the power to enforce compliance with these regulations and to obtain
injunctions or impose civil or criminal penalties in case of violations. The
landfill has not been subjected to fines or been closed, temporarily or
permanently, by regulatory authorities.
Our operation is subject to regulation, principally under the following
federal statutes, along with analogous state statutes:
The Federal Water Pollution Control Act of 1972 ("Clean Water Act").
The Clean Water Act established rules regulating the discharge of
pollutants into waters of the United States from a variety of sources,
potentially including waste disposal sites. For example, if leachate,
stormwater runoff, or other water from our landfill may be discharged into
surface waters, the Clean Water Act would, in many instances, require us to
obtain discharge permits, conduct periodic sampling and monitoring and,
under certain circumstances, reduce the quantity of pollutants in those
discharges.
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980 ("Superfund" or "CERCLA"). CERCLA addresses problems created by the
release or threatened release of hazardous substances into the environment.
CERCLA can impose retroactive, strict, joint, and several liability on the
present or former owners or operators of facilities that release hazardous
substances into the environment. Waste generators and transporters also can
be strictly liable. These persons may be liable for site investigation
costs, site cleanup costs and natural resource damages, even if the
original conduct giving rise to liability was in compliance with all
then-existing laws and regulations. The costs of a CERCLA cleanup can be
substantial. Liability under CERCLA is not dependent upon the existence or
disposal of hazardous wastes and many of the sites on the EPA National
Priorities List of Superfund sites are municipal solid waste disposal
facilities. It is possible that we might in the future be exposed to claims
regarding liability
3
<PAGE> 7
under CERCLA. South Carolina has a superfund program similar to CERCLA that
gives rise to many of the obligations and liability concerns discussed
above.
In this regard, the site on which the Shiloh Landfill is now permitted
and located was previously identified for a site assessment under CERCLA
after approximately 300 drums of waste materials were found on the site in
1977, when the site was an abandoned quarry being used as a shooting range.
The South Carolina Department of Health and Environmental Control
ultimately conducted a site inspection, and issued a report on December 30,
1996. According to the report, the drums had contained "unidentified
hazardous materials," and were removed in about 1977. The report stated
that several polyaromatic hydrocarbons were detected in the surface soils
on the site, but found that the hydrocarbons probably came not from the
drums but from the many vehicles that drove to the site while it was being
used as a shooting range. The report further stated that "[i]t is unlikely
for on-site surface soils to currently be contaminated from the drum
disposal activities since the drums were removed 9 [sic] years ago and new
soils were added. No contamination attributable to the site or above health
based benchmarks was detected in the ground water or sediment samples."
Based on the Department's report, the Environmental Protection Agency
issued its remedial site assessment decision on January 16, 1997. The EPA
decision found that no further remedial action was planned for the site.
The rationale for the decision was that the site inspection report
indicated contamination might not have been attributable to the drums
stored on the site, that the contamination had not migrated and that there
were few targets for contamination in the area. In 1998, subsequent to the
EPA's decision of no further remedial action planned, the South Carolina
Department of Health and Environmental Control issued the permit to operate
a C&D landfill on this site. Based on the site inspection report and the
remedial site assessment decision of the EPA, we have no reason to believe
that any further action will be taken with respect to this matter. However,
if further action is required, the Company could incur significant costs
that could materially impact our ability to repay the bonds.
The Clean Air Act. The Clean Air Act provides for federal, state and
local regulation of emissions of air pollutants into the atmosphere.
Programs established under certain Clean Air Act amendments will likely
subject solid waste disposal facilities to new reporting and operational
requirements.
Other State and Local Legislation. South Carolina and Greenville
County have laws and regulations governing waste disposal, air pollution,
and the design, operation, maintenance and closure of waste management
facilities.
As set forth in greater detail above under the heading "Bondholders'
Risks - Permitting," the South Carolina Department of Health and
Environmental Control has proposed a new solid waste regulation regarding
demonstration-of-need for new and expansions of existing solid waste
facilities, including construction and demolition debris facilities. As
discussed above, we cannot predict whether the proposed regulation will be
adopted in its current form or any other form, or what impact it might have
on our future operations if adopted.
In addition to costly and restrictive regulations, there are a number
of other factors that could result in higher disposal facility operating
costs and possibly decreased demand for disposal facilities. These factors
include not only the increasing public opposition to the siting and
operation of disposal facilities, but also increased efforts (including
legislation) to reduce the volume of waste and the dependence on
landfilling for disposal by promoting waste minimization, incineration,
composting and recycling. Several states have enacted laws that will
require counties to adopt comprehensive plans to reduce, through waste
planning, composting and recycling or other programs, the volume of solid
waste deposited in landfills within the next few years. A number of states
have taken or propose to take steps to ban the landfilling of certain
wastes, including yard wastes. We cannot predict whether any of these types
of regulatory initiatives will be instituted in the future by South
Carolina, Greenville County or any other local government in a way that
will affect our operation of the Shiloh landfill.
Legislative Initiatives. The continuing public awareness of and
interest in solid waste disposal, the siting of waste facilities, and the
protection of the environment frequently lead to federal state and local
legislative initiatives that could affect our operations. The prospects for
any legislative proposal are
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<PAGE> 8
inherently uncertain and we cannot accurately predict how our business or
operations may be affected by the adoption of new laws.
In recent years, some states and localities have instituted waste
"flow control" requirements, under which specified solid waste collected in
a jurisdiction is required to be delivered to a governmentally-designated
facility. In response to some of those enactments, the United States
Supreme Court and several lower federal courts have ruled that certain flow
control ordinances violated the Interstate Commerce Clause of the U.S.
Constitution. The U.S. Constitution grants the Congress the power to
authorize certain otherwise unconstitutional state and local actions
affecting interstate commerce, and Congress has been considering
legislation that would exempt some or all flow control requirements from
Constitutional invalidity.
Some states have also adopted or considered legislation to ban,
restrict or impose special taxes on waste imported from outside the state.
The U.S. Supreme Court has struck down some such measures as
unconstitutional discrimination against interstate commerce, as have
several lower federal courts. In response to these court decisions, bills
have been introduced in Congress in the past several years to enable states
to ban, restrict or differentially tax out-of-state waste.
We cannot predict whether Congress will pass legislation permitting
flow control or restrictions on the interstate movement of waste, or the
content of any such bills that may ultimately become law.
OPERATING RISKS AND POSSIBLE INSUFFICIENCY OF INSURANCE. Our business
exposes us to various risks, including potentially substantial claims for damage
to property, injuries to persons, negligence and professional errors or
omissions in the planning or performing of its services. WCA maintains $2
million of aggregate general liability insurance, limited to $1 million for each
occurrence, and an additional $9 million of excess umbrella liability coverage
on all of its operations, including the operations of WCA Shiloh and WCA's other
subsidiaries. Under WCA's insurance policies there are various exclusions, which
our management believes to be customary in the industry. Accordingly, there can
be no assurance that any liabilities that we may incur will be covered by WCA's
insurance or that the dollar amount of liabilities will not exceed applicable
policy limits.
POSSIBLE INSUFFICIENCY OF ENVIRONMENTAL IMPAIRMENT LIABILITY INSURANCE. We
are subject to potential liability for any environmental damage our facilities
may cause, particularly as a result of water or soil contamination. WCA Shiloh
and its parent company, WCA, currently maintain environmental impairment
liability insurance of $1,000,000 for each loss and $5,000,000 for all losses.
In the event of environmental losses, our financial condition and results of
operations could be materially and adversely affected.
FUTURE LANDFILL COSTS AND COMMITMENTS. In the future, we will also have
material financial obligations relating to closure and post-closure costs for
the Shiloh landfill or any other disposal facility we may own or operate. At
this time we cannot determine the precise amount of these future costs. We will
provide accruals based on engineering estimates as the available airspace is
utilized. Our estimates of total future liabilities are subject to change as
they are based on economic conditions, operational results, and regulations in
effect when the estimates are made, as well as a combination of internal and
external engineering specifications that have not yet been approved by the
appropriate regulatory authorities. In addition, WCA Shiloh is required from
time-to-time to obtain financial assurance security for performance, closure and
post-closure obligations, a portion of which may be funded with cash deposits or
other collateral. As of December 31, 1999, we have provided a letter of credit
in the amount of $30,000 to the state regulatory authority to collateralize our
obligation.
LACK OF LENGTHY OPERATING HISTORY. WCA Shiloh is a recently formed entity.
While it and its parent company, WCA, have executives with substantial
experience in the waste management business, WCA Shiloh and WCA themselves have
limited operating histories. The Shiloh landfill was opened in October 1998, and
was acquired by WCA Shiloh in September 1999.
LIMITED MARKETABILITY OF THE BONDS. There is currently no market for the
bonds and there is no assurance that Blount Parrish or other brokers and/or
dealers of securities will maintain a secondary market for the bonds.
5
<PAGE> 9
USE OF PROCEEDS
After paying expenses of the offering, WCA Shiloh will use a portion of the
proceeds of the offering for general operating expenses and working capital
needs. The balance of the proceeds will be paid to our parent corporation, WCA,
to repay a loan made by WCA to fund our acquisition of the Shiloh landfill. The
loan, which was in the original principal amount of $4,000,000, is evidenced by
a promissory note, bears interest at an annual rate of 12%, and is payable on
the earlier to occur of (a) the closing date of any refinancing transaction with
regard to the note or (b) September 1, 2002. We expect we will be able to pay
the WCA loan and accrued interest in full with proceeds from the offering.
MARKET AREA INFORMATION
The Shiloh landfill is located approximately one mile northeast of the town
of Travelers Rest in an unincorporated area of Greenville County, South
Carolina. In general terms, we consider the primary market area of the Shiloh
landfill to be Greenville County; the secondary and tertiary markets will
generally be confined to the Greenville-Spartanburg-Anderson Metropolitan
Statistical Area (which we refer to as the "MSA"). The population of Greenville
County and the MSA (which includes Greenville County) for 1990 and 1998 are as
follows:
<TABLE>
<CAPTION>
1998 1990 POPULATION GROWTH PERCENT GROWTH
<S> <C> <C> <C> <C>
MSA 918,351 830,539 87,812 10.6%
Greenville County 353,845 320,167 33,678 10.5%
</TABLE>
----------------------
Source: United States Department of Commerce; U.S. Census Bureau
The population growth shown in the table above has generally coincided with
significant economic growth in the region. Major employers in the County include
Michelin North America, KEMET Electronics, General Electric Company, Hitachi
Electronic Devices, Clemson University, Lockheed Martin, Bausch & Lomb and
others. The success of the operations of the Shiloh landfill is dependent on
continued construction and demolition activities in its market area, of which
there can be no assurance. For further information regarding the landfill's
dependence on construction activity in the market area, see the discussions
under the headings "Risk Factors" and "The Shiloh Landfill" herein.
DETERMINATION OF OFFERING PRICE
The bonds will be sold by WCA Shiloh to Blount Parrish at a discount from
their par value. The public offering price of the bonds and the amount of the
underwriter's discount will be determined by WCA Shiloh and Blount Parrish by
negotiation. Blount Parish may sell all or any part of the bonds to certain
dealers at a price that represents a concession not in excess of ___% of the par
value of the bonds.
6
<PAGE> 10
CAPITALIZATION
The following table sets forth the actual capitalization of WCA Shiloh at
December 31, 1999 and the capitalization of WCA Shiloh at December 31, 1999, as
adjusted. This table should be read in conjunction with our financial statements
and notes, which are included elsewhere in this prospectus.
For purposes of this table, the "As Adjusted" column gives effect to the
issuance of bonds offered in this prospectus, at an assumed amount of $5.0
million, excluding underwriting discount, and assumes the distribution of bond
proceeds to repay debt to our parent, WCA, at an assumed amount of $4.0 million.
<TABLE>
<CAPTION>
DECEMBER 31, 1999
(IN THOUSANDS)
ACTUAL AS ADJUSTED
------------------ ------------------
<S> <C> <C>
Current portion of long-term obligations $ 24 $ 24
------------------ ------------------
Long-term obligations, net:
Bonds -- 5,000
WCA 4,000 --
Other 53 53
------------------ ------------------
Total long-term obligations 4,053 5,053
------------------ ------------------
Member's equity:
Member's equity, net of distributions 86 86
Retained earnings 65 65
------------------ ------------------
Total member's equity 151 151
------------------
------------------
Total capitalization $ 4,228 $ 5,228
================== ==================
</TABLE>
7
<PAGE> 11
SUMMARY FINANCIAL INFORMATION
The following table presents summary statements of operations and financial
data of WCA Shiloh and our predecessor for the periods indicated. Also included
is balance sheet data of WCA Shiloh as of December 31, 1999. The financial data
for the periods ended December 31, 1998, August 31, 1999 and December 31, 1999
have been derived from the audited financial statements included elsewhere in
this prospectus.
You should read the summary financial information in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," WCA Shiloh's financial statements and notes thereto included
elsewhere in this prospectus.
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
--------------------------------------- -------------------
(IN THOUSANDS)
FOR THE PERIOD FOR THE FOR THE PERIOD
FROM INCEPTION TO PERIOD SEPTEMBER 1,
DECEMBER 31, JANUARY 1, 1999 TO
1998 1999 TO DECEMBER 31,
AUGUST 31, 1999
1999
------------------- ---------------- -------------------
<S> <C> <C> <C>
OTHER DATA:
Net cash provided (used) by operating activities $ (90) 218 186
Net cash used by investing activities (370) (28) (4,226)
Net cash provided (used) by financing activities 557 (199) 4,086
EBITDA (3) 297 292
EBITDA margin -- 57% 76%
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
------------------------
<S> <C>
BALANCE SHEET DATA:
Cash $ 46
Working capital (deficit) (88)
Property and equipment, net 4,292
Total assets 4,454
Long-term debt, net of current maturities 4,053
Total member's equity 151
</TABLE>
8
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
WCA Shiloh is a single-member limited liability company formed during 1999
for the purpose of acquiring the Shiloh landfill, a construction and demolition
debris, or C&D, landfill located near Travelers Rest, South Carolina. Our
acquisition was completed effective September 1, 1999. As a result of the
completion of this acquisition, we are engaged in the processing and disposal of
construction and demolition debris primarily serving the Greenville-Spartanburg,
South Carolina markets. Our strategy includes the continued marketing and
development of the Shiloh landfill.
RESULTS OF OPERATIONS
The landfill was permitted by a predecessor company in the summer of 1998
and subsequently opened October 19, 1998. Accordingly, operating results for
1998 are for slightly more than two months of activity. The landfill was
permitted, constructed, opened and operated by previous owners from inception
through August 31, 1999 (predecessor periods), at which time we acquired the
landfill and operated it through December 31, 1999 (successor period). Due to
the limited operating history and the change in ownership, the following
analysis is based on converting the related results for the period from
inception to December 31, 1998, the eight months ended August 31, 1999, and the
four months ended December 31, 1999, to an annualized basis.
On an annualized basis, revenue for the period ended December 31, 1998 was
approximately $252,000 compared to $782,000 for the period ended August 31, 1999
and $1,152,000 for the period ended December 31, 1999. From inception through
September 1999 monthly revenue generally increased. These increases were
directly attributed to increased volumes from third-party haulers as they became
more aware of the availability of our landfill. Revenue leveled off as the
winter months approached due to seasonal slow downs in construction and
demolition activity. Although there can be no assurances, we expect revenue to
continue to increase as we implement the strategy of marketing the landfill.
On an annualized basis, cost of services for the period ended December 31,
1998 was approximately $270,000 compared to $336,000 for the period ended August
31, 1999 and $276,000 for the period ended December 31, 1999. As a percentage of
annualized revenue, cost of services was 107%, 43% and 24%, respectively, for
such periods. Operating costs for a C&D landfill are relatively fixed and we
expect continued increases in revenue to be accomplished without proportional
increases in cost of services.
CURRENT OFFERING
We are offering $5,000,000 of registered bonds. The bonds will mature on
April 1, 2020, unless their maturity is accelerated to an earlier date. The
bonds will bear interest at an annual rate of ____% and interest will be paid
semiannually on each April 1 and October 1. After paying expenses of this
offering, a portion of the proceeds will be available for general operating
expenses and working capital needs. The balance of the proceeds will be paid to
our parent, WCA, to repay debt and accrued interest which was incurred in
acquiring the Shiloh landfill. We expect we will be able to pay the loan and
accrued interest in full.
LIQUIDITY AND CAPITAL RESOURCES
Since WCA Shiloh's formation, our primary use of cash has been for the
approximate $4.0 million purchase of the Shiloh landfill. This purchase was
funded by a loan from our parent company, WCA. As stated above, we intend to use
a significant portion of the proceeds related to this bond offering to repay our
parent company for the loan it made in connection with our acquisition of the
Shiloh landfill.
At December 31, 1999, we had current assets of $162,000 and current
liabilities of $250,000, representing a working capital deficit of $88,000 which
includes accrued interest of $160,000 due to our parent. However, for the
four-month period ended December 31, 1999, during which we operated the
landfill, cash flow from operating activities was $186,000, or $558,000 on an
annualized basis. We believe proceeds from the related bond offering and cash
generated from operations will be sufficient to fund any current obligations
from existing indebtedness.
9
<PAGE> 13
We are pursuing additional waste streams for our landfill. Additional
volumes at competitive market prices would substantially enhance our results and
cash flow as a substantial amount of the landfill operating costs are fixed in
nature and will, therefore, not increase proportionately as volumes and revenue
increase.
New competitors can always enter a market place. With landfills, the cost
of entry can be significant in both cash and time requirements. The successful
permitting and construction of a new C&D landfill in the Greenville-Spartanburg,
South Carolina market could have an adverse impact on our operating results and
liquidity. In this regard, one of our competitors, Republic Waste, has applied
for a permit to operate a C&D landfill in nearby Union County, approximately 70
miles from our landfill site.
Routine capital expenditure requirements for the existing operations
include equipment purchases, landfill construction and permit expansion. We
currently estimate approximately $250,000 will be required for these
expenditures during 2000 and expect to fund these requirements with cash
generated from operations and the proceeds of this offering. If volume disposed
in the landfill increases significantly, the estimate of cash requirements may
increase due to timing considerations of future landfill construction. If
sufficient funds are not available, we plan to restrict our capital expenditures
to an amount available for such purposes.
Under the agreement to purchase the Shiloh landfill, we are obligated to
pay the seller additional consideration in the amount of $500,000 if our permit
is expanded by a minimum of 740,000 cubic yards of airspace. The consideration
is payable to the seller in cash, a WCA convertible note or some combination of
cash and convertible note at the seller's discretion. We currently have a permit
expansion application in process, but have not yet submitted it. If the
application is granted for the full amount of airspace requested, our obligation
to make the additional $500,000 payment will be triggered. In this event, we
expect to fund the additional purchase price payment with a combination of cash
generated from operations, long-term financing or an additional loan or
investment from our parent.
We consider permit expansions to be a normal part of our business. At this
time we know of no reason why we would not receive the permit expansion.
Nevertheless, there can be no assurance that we will, in fact, receive all or
any portion of the additional airspace we have applied for, either in connection
with our pending application or any possible future application.
The South Carolina Department of Health and Environmental Control is
attempting to amend its regulation governing its granting of original permits
and expansion permits for solid waste disposal facilities (including C&D
landfills). Under the proposed rules, no permit to construct a new solid waste
disposal facility or to expand an existing solid waste disposal facility will be
issued until the applicant has demonstrated to the Department a need for the new
or expanded facilities, taking into account waste generated in the jurisdiction
subject to a county or regional solid waste management plan adopted under
applicable South Carolina law. The proposed amendment further provides that
where there are at least two commercial disposal facilities under separate
ownership within the planning area that meet the disposal needs for the area, no
new disposal capacity will be permitted. The proposed regulation also provides
that with regard to demonstration-of-need, any solid waste disposal facility
existing on the effective date of the regulation that exhausts its capacity will
be allowed to apply to the Department for a permit to either construct a new
solid waste disposal facility at the existing landfill's authorized annual rate
of disposal, or expand the volume of the existing landfill.
The proposed regulation has been discussed at a public hearing conducted on
February 10, 2000. Currently, the proposed regulation is before the legislature
which has the power to amend or modify it prior to approval. As a result, we are
not in a position to predict whether the proposed regulation will be adopted in
its current form or any other form, or what its impact on our operations will be
if it is adopted.
The currently proposed regulation is similar to regulations in effect in
other jurisdictions that have not significantly impaired our ability to receive
expansion permits for C&D landfills. In fact, since the proposed regulation may
limit the establishment of new landfills, it might have the effect of
restricting competition in our market area. However, we cannot be sure that the
proposed regulation, in whatever form it may be adopted, will not interfere with
our ability to obtain future expansion permits.
10
<PAGE> 14
In the future, we will have financial obligations relating to closure, and
possibly post-closure, costs for the Shiloh landfill or any other disposal
facility we may own or operate. Although we cannot determine the precise amount
of these future costs, the Shiloh landfill does not currently require
post-closure monitoring and the majority of the closure activity occurs as part
of regular operations. As of December 31, 1999, we have provided a letter of
credit in the amount of $30,000 to the state regulatory authority to
collateralize our obligation. We will provide accruals based on engineering
estimates as the available airspace is utilized. However, at this time we
estimate the aggregate accrual required upon closure of the facility to be less
than $50,000. Our estimates are subject to change as they are based on current
economic conditions, operational results, and regulations in effect from time to
time.
SEASONALITY
We expect our operating results to fluctuate due to seasonality. Typically,
revenue in the second and third calendar quarters is higher than in the first
and fourth quarters due to decreased construction and demolition activity during
the winter months. However, although revenue fluctuates, we believe our
operating costs will remain relatively level throughout the year. Consequently,
we expect income before taxes also to be higher during the second and third
calendar quarters of the year.
11
<PAGE> 15
THE SHILOH LANDFILL
GENERAL
Our sole operating facility is the Shiloh landfill located north of
Greenville, South Carolina in an unincorporated area of Greenville County about
a mile northeast of the town of Travelers Rest.
The landfill is located on an 85.12 acre tract, of which approximately 20
acres are within the area covered by WCA Shiloh's current landfill permit issued
by the South Carolina Department of Health and Environmental Control. The permit
allows WCA Shiloh to accept construction and demolition (sometimes referred to
as "C&D") debris for disposal at the site. This category of waste materials
includes lumber, bricks and blocks, hardened concrete, plaster and drywall,
shingles and roofing materials, pipes, floor and wall materials, rocks, tree
stumps, brush and limbs and other non-hazardous materials commonly cleared from
construction sites. It may also receive shredded tires and some other waste
materials not necessarily generated by construction activities. However, most of
the waste materials accepted by the Shiloh landfill are generated in connection
with demolition of old structures and clearing of land for new construction.
Accordingly, the level of business at the Shiloh landfill and competing C&D
landfills is dependent on the level of construction and demolition activity in
their respective market areas.
The Shiloh landfill is not authorized by its permit to accept so-called
"municipal solid waste," which is the type of waste typically generated by
residential households and businesses such as restaurants and retail
establishments.
The Shiloh landfill was originally owned and operated by Eastman Brown
Holdings LLC, which obtained the first landfill operating permit for the site.
We acquired the landfill and its permit from Eastman Brown in September 1999.
VOLUME AND REVENUES
Since the opening of the Shiloh landfill by Eastman Brown in October 1998
the volume of waste accepted for disposal at the facility has increased. In the
calendar quarter ended December 31, 1999, the landfill accepted approximately
184 tons of C&D waste per day, or a total of 13,158 tons for the quarter, and
received revenue of $270,000 for the quarter. On an annualized basis at this
rate the landfill would process approximately 53,000 tons of C&D waste during a
year of operations, and at a tipping fee of approximately $20.50 per ton would
generate approximately $1,100,000 in annual revenue. The landfill's operating
permit allows for the maximum disposal of 100,000 tons on an annualized basis.
As of December 31, 1999, the remaining airspace available under the existing
permit is estimated to be in excess of 1.2 million tons.
CUSTOMERS
Most of our customers are hauling companies that for a fee provide
"roll-off" containers at construction sites and dispose of the C&D waste once
the container is full or the construction is complete. Since the hauler is
responsible for disposing of the debris, it selects the landfill to which the
debris will be sent, based on cost (i.e., "tipping" fees), logistics and other
factors. Although landfills typically publish a gate rate tipping fee for small
quantities of waste, haulers of more significant volumes generally negotiate a
lower fee based on the volume of business they bring to the landfill. Consistent
with this industry practice, we offer discounted tipping fees to large volume
haulers. We do this on a negotiated basis, and do not typically have long-term
written contracts either guaranteeing a discounted tipping fee for a specified
period or, on the other hand, requiring the hauler to dispose of specified
volumes of waste at the Shiloh landfill. Eastman Brown had three major customers
that made up 29%, 13%, and 11% of revenue, respectively, for the eight month
period ended August 31, 1999. We had four major customers that made up 20%, 10%,
10% and 10% of revenue, respectively, for the four months ended December 31,
1999.
COMPETITION
There are five C&D landfills, including the Shiloh landfill, operating
within the area around the cities of Greenville and Spartanburg that comprise
the Shiloh landfill's principal market area. Three of these landfills have
permits that allow them to accept municipal solid waste as well as C&D debris.
The competing landfills are owned and operated by large companies such as Waste
Management and Allied Waste, a small local operator and
12
<PAGE> 16
Greenville County. In addition, Republic Waste has applied for a permit for a
combined municipal solid waste and C&D landfill in nearby Union County, South
Carolina.
Most C&D debris is bulky and heavy, and significant hauling costs are
incurred in transporting it lengthy distances from the construction site to the
C&D landfill. For this reason, most C&D debris is hauled to landfills within a
relatively short distance of the construction site. A landfill operator can,
however, compete to receive business from more distant sites by lowering the
tipping fees charged to haulers bringing in debris from sites farther away.
EMPLOYEES
WCA Shiloh currently has 6 employees, all of whom are engaged in the
operation of the Shiloh landfill.
SUMMARY OF OPERATING DATA
Pro forma and projected statements of operations for the years ending
December 31, 1999, and 2000 are set forth below. The pro forma statement of
operations simply combines our operating results for the period September 1,
1999 through December 31, 1999 to Eastman Brown's operating results for the
period January 1, 1999 through August 31, 1999. The projected statement assumes,
among other matters, revenues at a level slightly higher than that achieved
during the last quarter of 1999, on an annualized basis, and costs at
approximately the same rate as experienced during such quarter.
<TABLE>
<CAPTION>
YEAR ENDED
--------------------------------------------------------------------------
DECEMBER 31, 1999 (PRO FORMA) DECEMBER 31, 2000 (PROJECTED)
------------------------------------- ----------------------------------
REVENUE:
<S> <C> <C>
Volume (tons per day) 148 175
Average tipping fee per ton $ 21.38 $ 22.58
Operating days 286 286
TOTAL REVENUE $905,000 $1,130,000
COST OF SERVICES:
Salaries and wages 183,000 197,000
Other operating expenses 117,000 175,000
-------- ----------
TOTAL COST OF OPERATIONs 300,000 372,000
EBITDA $605,000 $ 758,000(1)
======== ==========
</TABLE>
- -----------------------
(1) Excludes $350,000 of estimated costs and expenses incurred in connection
with the issuance of the bonds and $_______ accrued interest on such bonds. Also
excludes the effect of financing the $500,000 payment that will be due to our
predecessor, Eastman Brown, if our permit expansion application is granted this
year. The above costs would not ordinarily be taken into account in calculating
EBITDA in any event.
13
<PAGE> 17
DESCRIPTION OF THE BONDS
GENERAL
The bonds dated April 1, 2000 will mature on April 1, 2020, unless their
maturity is accelerated to an earlier date. Interest on the bonds will be paid
semiannually on each April 1 and October 1 beginning October 1, 2000, and will
be computed on the basis of a 360-day year of twelve 30-day months. The bonds
will bear interest from their date at an annual rate of ______%.
The bonds are fully registered bonds without coupons issued in
denominations of $5,000 or any integral multiple thereof. Exchanges and
transfers will be made without charge to the owners other than for taxes or
governmental charges required in connection with the exchange or transfer.
Principal (and premium, if any) on the bonds will be payable at the
principal corporate trust office of the trustee. Interest on the bonds will be
payable by check or draft mailed to the persons in whose names they are
registered at the close of business on the June 15 or December 15 before the
interest payment date (the "record date"), or, at the option of any registered
owner of not less than $500,000 principal amount of the bonds, by wire transfer
to any address in the continental United States on the applicable interest
payment date to such owner as of the applicable record date if such owner
provides the trustee with written notice of such wire transfer address at least
15 days prior to such record date, which notice may provide that it will remain
in effect with respect to subsequent interest payment dates unless and until
changed or revoked by subsequent notice.
NATURE OF WCA SHILOH'S OBLIGATION; SECURITY FOR THE BONDS
The bonds are general obligations of WCA Shiloh. Our obligations with
regard to the bonds are not subordinated to any other currently outstanding debt
of WCA Shiloh. In order to secure payment of the bonds, the indenture grants to
the trustee a security interest in all revenue of WCA Shiloh derived from its
ownership and operation of the landfill, including commercial tipping fees and
accounts receivable, as well as its real property and certain other assets
related to the Shiloh landfill. In addition, our parent company, WCA, has
pledged all of the ownership interest in WCA Shiloh (i.e., its "member's"
interest) to the trustee as security for the bonds.
To the extent provided in the indenture, the trustee has a prior claim on
certain amounts for the payment of its reasonable fees and expenses and for the
repayment of advances made by it to effect performance of certain covenants in
the indenture.
Our parent Company, WCA, has not guaranteed the bonds, and has no liability
in connection with the bonds other than its possible loss of its member's
interest in WCA Shiloh as a result of its pledge.
REDEMPTION PRIOR TO MATURITY
Mandatory Sinking Fund Redemption of the Bonds. The Bonds are subject to
mandatory redemption pursuant to mandatory sinking fund requirements, at a
redemption price of 100 percent of the principal amount redeemed plus interest
accrued to the redemption date, beginning on April 1, 2001, in the following
principal amount in the years specified:
14
<PAGE> 18
<TABLE>
<CAPTION>
YEAR OF
REDEMPTION ON PRINCIPAL AMOUNT
APRIL 1, TO BE REDEEMED*
------------- ----------------
<S> <C>
2001 $ 50,000
2002 55,000
2003 65,000
2004 75,000
2005 85,000
2006 100,000
2007 115,000
2008 130,000
2009 150,000
2010 170,000
2011 200,000
2012 225,000
2013 260,000
2014 300,000
2015 345,000
2016 395,000
2017 455,000
2018 525,000
2019 605,000
</TABLE>
- --------------------------
* Preliminary, subject to change.
If retired only by mandatory sinking fund redemption prior to their stated
maturity, there would remain $695,000 in principal amount of the bonds due April
1, 2020, to be paid at maturity.
Extraordinary Optional Redemption Without Premium. The bonds are subject to
redemption in whole, but not in part, on any date at a redemption price equal to
the aggregate principal amount of the bonds plus accrued interest to the
redemption date, without premium, if WCA Shiloh chooses to redeem the bonds upon
the occurrence of either of the following events:
(a) The Shiloh landfill is damaged or destroyed (i) to such extent that it
cannot reasonably be restored within a period of six months to its condition
immediately before such damage or destruction, or (ii) to such extent that WCA
Shiloh is prevented from carrying on its normal operations at the landfill for a
period of six months;
(b) Title to, or the temporary use of, all or a substantial part of the
landfill is taken under the power of eminent domain by any governmental
authority, or any other person or entity acting under governmental authority,
(i) to such extent that the landfill cannot reasonably be restored within a
period of six months to a condition of usefulness comparable to that existing
before the taking, or (ii) if such taking results in WCA Shiloh's being
prevented from carrying on its normal operations at the landfill for a period of
six months.
Optional Redemption. The bonds are subject to optional redemption, in whole
or in part on any date on or after April 1, 200_, at the election of WCA Shiloh,
at the applicable redemption price (expressed as a percentage of outstanding
principal amount) shown below plus accrued interest to the redemption date:
15
<PAGE> 19
<TABLE>
<CAPTION>
REDEMPTION DATES
(DATES INCLUSIVE) REDEMPTION PRICES
<S> <C>
April 1, 200_ through March 31, 200_ ___%
April 1, 200_ through March 31, 200_ ___%
April 1, 200_ and thereafter 100%
</TABLE>
Notice and Effect of Redemption. At least 30 days and not more than 45 days
before any redemption date, the trustee will send to the bondholders a notice of
the call for redemption identifying each bond to be redeemed in whole or in part
of a bond, and specifying the redemption date and the redemption price. The
notice will also state that interest on the bond will cease to accrue from and
after the redemption date. The notice will be sent by registered or certified
mail to the owner of each bond to be redeemed at the address shown on the
trustee's registration books. Failure to give notice to the owner of any bond,
or any defect in notice, will not affect the redemption of any other bonds for
which proper notice is given. If less than all of the bonds are called for
redemption, the portion of the bonds to be redeemed will be selected in the
manner the trustee determines.
On the date designated for redemption, any bond (or portion of a bond)
called for redemption will become due and payable (unless notice of redemption
is made conditional upon the timely deposit of required funds) and, provided
that sufficient funds for the payment of the redemption price thereof are then
on deposit with the trustee, interest will cease to accrue on the bonds (or
portions of bonds) called for redemption.
PAYING AGENT AND REGISTRAR
Regions Bank, Montgomery, Alabama is trustee under the indenture and also
has been appointed paying agent and registrar. The corporate trust office of the
trustee for presentment of bonds for payment is in Montgomery, Alabama.
THE INDENTURE
The following, in addition to information provided elsewhere in this
prospectus, summarizes provisions of the indenture. You should refer to the
indenture itself for more complete information.
PLEDGE AND SECURITY
Pursuant to the indenture, all of WCA Shiloh's revenues derived from its
ownership and operation of the landfill, including commercial tipping fees and
accounts receivable, as well as its real property and certain other assets
related to the Shiloh landfill are assigned and pledged to the trustee to secure
the payment of the bonds.
To the extent provided in the indenture, the trustee has a prior claim on
certain amounts for the payment of its reasonable fees and expenses and for the
repayment of advances made by it to effect performance of certain covenants in
the indenture.
Additionally, our corporate parent, WCA, has pledged all of the membership
interests in WCA Shiloh to the trustee to secure payment of the bonds.
PAYMENTS TO WCA
Under the indenture, WCA Shiloh is permitted to make payments to its
parent, WCA, or any other affiliated companies, whether as dividends,
distributions or otherwise, as long as it is making all payments required to be
made by it to the trustee under the indenture and it is not otherwise in default
under the indenture at the time it makes the payment. Under these provisions, as
set forth above, we expect that a substantial part of the proceeds of this
offering will be paid to our parent corporation, WCA, to repay accrued interest
and the loan made by it to fund our acquisition of the Shiloh landfill.
16
<PAGE> 20
NON-PRESENTMENT OF BONDS
If any bond is not presented for payment when it becomes due, either at
maturity or at the date fixed for redemption or otherwise, if funds sufficient
to pay such bond have been deposited with the trustees, all liability of WCA
Shiloh for the payment of such bond will cease. The trustee shall hold such
funds, without liability for interest, for the benefit of the owner of such
bond. Such funds will be held in a separate and segregated fund and will not be
invested. Any money so deposited with and held by the trustee not so applied to
the payment of such bond within two years after the final maturity or final
payment of the bonds shall at WCA Shiloh's direction, be paid by the trustee to
WCA Shiloh. Thereafter, bondholders shall be entitled to look only to WCA Shiloh
for payment, but only to the extent of the amount so repaid to WCA Shiloh. WCA
Shiloh will not be liable for any interest on the bonds after it has made the
required deposit, and it will not be regarded as a trustee of any funds it
receives back from the trustee.
The provisions described above are subject to all applicable escheat laws.
DEFAULTS AND REMEDIES
The indenture defines each of the following events as an "event of
default":
(a) payment of any interest on any bond is not made when
due, and the failure to make such payment is not cured within two
(2) business days after notice;
(b) payment of the principal of or any premium on any bond
is not made when due and, whether at stated maturity, by
redemption, acceleration or otherwise, the failure to make such
payment is not cured within two (2) business days after notice;
(c) failure by WCA Shiloh to observe or perform any other
covenant agreement or obligation on its part to be observed or
performed contained in the indenture or in the bonds, and the
failure continues for a period of 60 days after written notice to
WCA Shiloh specifying the failure and requiring that it be
remedied. This notice may be given by the trustee in its
discretion and shall be given by the trustee at the written
request of the owners of not less than a majority of the
aggregate principal amount of bonds then outstanding; and
(d) WCA Shiloh either: (i) commences a proceeding under any
federal or state insolvency reorganization or similar law, or has
such a proceeding commenced against it and has an order of
insolvency or reorganization entered against it or the proceeding
is not dismissed or stayed within 90 days; or (ii) has a
receiver, conservator, liquidator or trustee appointed for it or
for the whole or any substantial part of its property.
Upon the occurrence of an event of default as described in paragraphs (a)
and (b) above, the trustee shall, and upon the occurrence of any other event of
default described above, the trustee may, and if requested to do so by the
owners of a majority in aggregate principal amount of the bonds then outstanding
shall, accelerate the maturity of the bonds.
Upon the occurrence of an event of default, the trustee may also pursue any
remedy available to it by law or in equity by suit, action, mandamus or other
proceeding to enforce the payment of principal of, premium, if any, and interest
on the bonds, and may foreclose on WCA's pledge of its member's interests in WCA
Shiloh granted by WCA pursuant to the indenture.
The owners of a majority in aggregate principal amount of the bonds then
outstanding will have the right, by written instrument delivered to the trustee,
to direct the time, method and place of conducting all remedial proceedings to
be taken by the trustee under the indenture, but the direction must comply with
law and the indenture.
No owner of any bond will have the right to pursue any remedy under the
indenture unless (i) an event of default has occurred of which the trustee has
been notified or is deemed to have, or is required to take notice as provided in
the indenture, (ii) the owners of at least a majority in aggregate principal
amount of the bonds
17
<PAGE> 21
outstanding, have made written request to the trustee to pursue such remedy and
have offered to provide the trustee with indemnity as provided in the indenture,
and (iii) the trustee does not comply with such request after receipt of such
request and offer of indemnity.
WAIVERS OF EVENTS OF DEFAULT
The trustee may in its discretion at any time, except as provided below,
waive any event of default described in the indenture and its consequences and
may rescind and annul any declaration of maturity of principal of the bonds;
provided, however, there shall not be waived any event of default described in
paragraph (a) or (b) above except with the written consent of the owners of all
bonds then outstanding, nor shall any declaration of acceleration in connection
therewith be rescinded or annulled except with the written consent of the owners
of at least a majority in aggregate principal amount of the bonds then
outstanding.
MAINTENANCE OF CORPORATE EXISTENCE; CONSOLIDATION OR MERGER
We agree that so long as any bonds are outstanding we will maintain our
corporate existence, will not transfer all or substantially all of our assets
and will not consolidate with or merge into another corporation, without the
express written consent of the holders of a majority in principal amount of the
bonds; provided, however that we may consolidate with or merge into another
direct or indirect wholly-owned subsidiary of WCA, and may consolidate with or
merge into another corporation or transfer all or substantially all of our
assets and thereafter dissolve and terminate our existence, but only on the
condition that (a) the resulting corporation or transferee, as applicable, shall
expressly assume and agree in writing to perform all of our obligations under
the indenture, and is duly qualified to do business in South Carolina, (b) the
resulting corporation or transferee, as applicable, has a consolidated net
worth, determined in accordance with generally accepted accounting principles,
equal to or greater than our consolidated net worth immediately prior to such
consolidation, merger or transfer and (c) the transferee or the corporation with
which we are merged or consolidated shall not have any unresolved legal or
administrative proceedings pending before any court or other tribunal, the
results of which could materially and adversely affect such corporation's or
transferee's net worth, its ability to assume our obligations under the
indenture, or our ability to operate the Shiloh landfill.
SUPPLEMENTAL INDENTURES
The indenture provides that WCA Shiloh and the trustee may, without notice
to or the consent of the owners of any of the bonds, enter into supplemental
indentures for any of the following purposes:
(a) to cure any ambiguity, formal defect or omission in the
indenture;
(b) to grant to the trustee for the benefit of the bondholders
any additional rights, remedies, powers or authority;
(c) to assign additional revenue under the indenture;
(d) to accept additional security and instruments and documents
of further assurance;
(e) to add to the covenants, agreements and obligations of WCA
Shiloh under the indenture, other covenants, agreements and
obligations to be observed for the protection of the owners, or to
surrender or limit any right, power or authority reserved to or
conferred upon WCA Shiloh in the indenture:
(f) to evidence any succession to WCA Shiloh and the assumption
by its successor of the covenants, agreements and obligations of WCA
Shiloh under the indenture and the bonds;
(g) to permit the use of a book entry system to identify the
owner of an interest in an obligation issued by WCA Shiloh under the
indenture, whether that obligation was formerly, or could be,
evidenced by a tangible security;
(h) to permit the trustee to comply with any obligations imposed
upon it by law;
18
<PAGE> 22
(i) to specify further the duties and responsibilities of, and to
define further the relationship among, the trustee, the registrar and any
paying agents;
(j) to achieve compliance of the indenture with any applicable
federal securities or tax law, and
(k) to permit any other amendment which, in the judgment of the
trustee, is not to the prejudice of the trustee or the bondowners.
The owners of a majority in aggregate principal amount of the outstanding
bonds shall have the right to consent to the execution by WCA Shiloh and the
trustee of any other supplemental indentures, except that no supplemental
indenture shall permit or be construed as permitting without the consent of the
owner of each bond affected:
(a) (i) an extension of the maturity of the principal of or the
interest on any bond or (ii) a reduction in the principal amount of any
bond or the rate of interest or premium thereof; or
(b) (i) the creation of privilege or priority of any bond or
bonds over any other bond or bonds, or (ii) a reduction in the aggregate
principal amount of the bonds required for consent to a supplemental
indenture.
DISCHARGE OF THE INDENTURE
The indenture provides that if WCA Shiloh pays or makes provision for
payment of money or government obligations (defined as direct obligations of or
obligations the timely payment of the principal of and interest on which are
fully and unconditionally guaranteed by, the United States of America) to or for
the benefit of the owners of the bonds, in an amount or amounts equal to the
principal of, premium, if any, and interest due or to become due on the bonds,
and if WCA Shiloh pays or causes to be paid to the trustee all sums of money due
or to become due according to the provisions of the indenture, then the estate
and rights granted by the indenture shall cease and be void and the lien of the
indenture shall be discharged and defeased. After that, the owners of the bonds
must look only to the deposited moneys and/or government obligations for payment
of principal of, premium, if any, and interest on the bonds.
REMOVAL OF TRUSTEE
The trustee may be removed at any time by an instrument or document in
writing delivered to the trustee, with copies thereof mailed to WCA Shiloh, the
registrar, and any paying agents, and signed (i) by or on behalf of the holders
of not less than a majority in aggregate principal amount of the bonds then
outstanding, or (ii) as long as no event of default has occurred and is
continuing, by WCA Shiloh.
The trustee also may be removed at any time for any breach of trust or for
acting or proceeding in violation of, or for failing to act or proceed in
accordance with, any provision of the indenture with respect to the duties and
obligations of the trustee by any court of competent jurisdiction upon the
application of WCA Shiloh or the holders of not less than 20% in aggregate
principal amount of the bonds then outstanding under the indenture.
RATINGS
No ratings have been applied for or received in connection with the
issuance of the bonds.
CERTAIN TAX CONSIDERATIONS - ORIGINAL ISSUE DISCOUNT
The following is a discussion of the federal income tax consequences of the
ownership of bonds relating to the applicability of the original issue discount
rules. This summary is based upon laws, regulations, rulings and decisions now
in effect, all of which are subject to change. This discussion is only a summary
and does not address all aspects of original issue discount. Also, the
discussion below does not purport to deal with federal income tax
19
<PAGE> 23
consequences applicable to all categories of investors, some of which may be
subject to special rules. Further, there are tax issues for an investor in
addition to original issue discount. Accordingly, each investor should consult
its tax advisor in determining the federal, state, local and any other tax
consequences to it of the purchase, ownership and disposition of the bonds.
Original issue discount is the excess of the stated redemption price over
the issue price. The existence of, and the amount of, any original issue
discount is a function of the issue price of the bonds. The issue price is the
initial offering price to the public (excluding the underwriter, bond houses and
brokers) at which price a substantial amount of the bonds are sold. However, the
original issue discount will be treated as zero if the amount of the discount is
less than 1/4 of 1% of the stated redemption price at maturity multiplied by the
number of complete years to maturity.
If the bonds have original issue discount, the amount of original discount
is required to be included in the bondholders' income as interest income over
the term of the bonds. The amount of interest income is calculated in accordance
with the constant-interest method that takes into account the compounding of
interest. The existence of original issue discount means that the holder will be
taxed on an amount of interest greater than the interest paid on the bonds.
LEGAL PROCEEDINGS
We are not aware of any pending or threatened litigation affecting our
ownership or operation of the Shiloh landfill, or with regard to the conduct of
our business in general.
20
<PAGE> 24
MANAGEMENT
DIRECTORS AND OFFICERS
Under its Limited Liability Agreement, WCA Shiloh is organized as a
member-managed limited liability company formed under the Delaware Limited
Liability Company Act. As such, it is managed directly by its sole member, WCA,
and it has no board of managers or other governing body resembling a corporate
board of directors.
The executive officers of WCA Shiloh and certain information about such
persons are described below.
<TABLE>
<CAPTION>
NAME AGE TITLE
<S> <C> <C>
Tom J. Fatjo, Jr. 59 Chairman
Jerome M. Kruszka 51 President and Chief Executive
Officer
Charles A. Casalinova 41 Vice President and Chief Financial
Officer
Tom J. Fatjo, III 35 Vice President and Treasurer
Michael L. Paxton 35 Vice President
J. Edward Menger 37 Secretary and General Counsel
</TABLE>
Tom J. Fatjo, Jr. currently also serves as Chairman and Chief Executive
Officer of WCA. He has over 30 years experience in the solid waste industry. Mr.
Fatjo served as Chairman and Chief Executive Officer of TransAmerican Waste
Industries, Inc. from April 1992 to May 1998. He was the founder and served as
Chairman and Chief Executive Officer of Republic Waste Industries, Inc. from
January 1990 to August 1991. He founded BFI in 1966 and served as Co-Chief
Executive Officer. He founded or was a member of the organizing group of
investors for a number of businesses, including Fannin Bank, Mortgage Banque,
Criterion Group, The Houstonian, Houston Partners, LivingWell, Inc. and First
Financial Alliance. Mr. Fatjo received a Bachelor of Science degree from Rice
University and became a Certified Public Accountant in 1963.
Jerome M. Kruszka currently also serves as President and Chief Operating
Officer of WCA. He served as Chief Operating Officer for TransAmerican Waste
Industries, Inc. from November 1996 to May 1998 and President from December 1996
to May 1998. Mr. Kruszka began his career with Waste Management, Inc. in 1971.
Between 1971 and 1996, he held several positions at Waste Management, Inc. and
its affiliates, including General Manager, District Manager and Northern
California Regional Manager. He also held positions of Vice President of
Operations, Western Regional Manager and was a member of the Executive Committee
with Chemical Waste Management, Inc. In 1994, he accepted the position of
Division President and General Manager in charge of disposal operations for the
southern Texas market.
Charles A. Casalinova has 19 years experience in the solid waste industry
and currently also serves as Vice President and Chief Financial Officer of WCA.
Mr. Casalinova began his career with Waste Management, Inc. in 1981. Between
1981 and July of 1999 he held several positions at Waste Management, Inc.,
including Division Controller, Regional Chief Information Officer, Acquisition
Controller, Vice President/Regional Controller for Louisiana, Mississippi,
Arkansas, Oklahoma, North Texas, and most recently, Vice President/Regional
Controller for Illinois and Indiana. He received a Bachelor of Business
Administration degree in Accounting from the University of Akron and became a
Certified Public Accountant in 1989.
Tom J. Fatjo, III currently also serves as Vice President and Treasurer of
WCA. He served as Vice President and Treasurer of TransAmerican from April 1992
to May 1998. From January 1990 to December 1991, Mr. Fatjo was employed by
Republic Waste Industries, Inc. From 1988 to 1990, he was Vice President of
First Financial Alliance, Inc. He received a Bachelor of Business Administration
degree in Finance from the University of Texas. Mr. Fatjo is the son of Tom J.
Fatjo, Jr., Chairman and Chief Executive Officer of our parent company, WCA.
21
<PAGE> 25
Michael L. Paxton currently also serves as Vice President and Corporate
Controller of WCA. He joined TransAmerican in May 1993 and was promoted to
Corporate Controller in August 1995. He served as Vice President of
TransAmerican from February 1997 to May 1998. From October 1989 until May 1993,
he was employed by NL Industries, Inc. and from January 1987 until October 1989,
was employed by Ernst & Young, L.L.P. He is a Certified Public Accountant and
received a Bachelor of Business Administration degree in Accounting from the
University of Houston.
J. Edward Menger currently also serves as General Counsel of WCA. He was a
partner in the Houston law firm of Short & Ketchand, L.L.P. until 1999, when he
joined WCA. From 1995 through 1998, Mr. Menger served as counsel for
TransAmerican Waste Industries, Inc. handling corporate matters and litigation.
He received a Bachelor of Arts degree from Baylor University and a Juris Doctor
with honors from the University of Maryland School of Law.
None of the above directors or officers of WCA Shiloh has been involved in
any material legal proceedings during the past five years, including bankruptcy
and significant or material criminal offenses. Tom J. Fatjo, III is the son of
Tom J. Fatjo, Jr. No other above directors or officers of WCA Shiloh are related
by blood or marriage.
EXECUTIVE COMPENSATION
The salaries of the executives listed in the table below are paid by our
parent company, WCA. None of the executive compensation is charged directly to
WCA Shiloh or any other subsidiary of WCA.
<TABLE>
<CAPTION>
NAME TITLE AGGREGATE REMUNERATION
<S> <C> <C>
Tom J. Fatjo, Jr. Chairman $200,000
Jerome M. Kruszka President and Chief Executive Officer $200,000
Charles A. Casalinova Vice President and Chief Financial Officer $196,174
All executive officers as a group
(six persons) $867,809
</TABLE>
Each of the above officers has an employment agreement with WCA. Tom Fatjo,
Jr. and Mr. Kruszka each have employment agreements that are in effect through
December 31, 2001, unless such person's employment is terminated earlier upon
his death, disability or termination for cause. Their employment agreements also
provide for a lump sum bonus in the amount of $100,000 each in the event WCA
completes an initial public offering of equity securities satisfying certain
conditions, as well as the achievement by WCA of certain EBITDA levels. Their
agreements also provide for additional compensation in the event the Company
engages in certain business combinations involving a change in control. Mr.
Casalinova's employment agreement provided for certain additional payments to be
made to him in connection with his joining the Company and moving to Houston,
and also provides for a six-month period of severance pay in the event of
termination. Mr. Casalinova is also eligible to receive certain additional
compensation in the event of specified business combinations involving a change
in control, completion of an initial public offering, and the achievement by WCA
of certain EBITDA levels.
STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN STOCKHOLDERS
WCA is the sole owner of all membership interests of WCA Shiloh, which is
our only type of ownership interest or equity security.
The following table sets forth certain information regarding the beneficial
ownership of WCA's common stock as of April __, 2000, for (i) each officer of
WCA Shiloh and (ii) such officers as a group. To our knowledge, each individual
named below has sole investment and voting power with respect to shares of
common stock indicated as beneficially owned by him, except as otherwise noted.
Share ownership in each case includes shares issuable upon exercise of
outstanding options and/or warrants that are exercisable within 60 days of April
__, 2000. Each of our officers who is also an officer or director of WCA
disclaims ownership in his individual capacity of the membership interests in
WCA Shiloh owned by WCA.
22
<PAGE> 26
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES PERCENTAGE OF ALL SHARES
<S> <C> <C>
Tom J. Fatjo, Jr. 693,871(1)(5) 13.18%
Jerome M. Kruszka 331,871(2) 6.31%
Tom J. Fatjo, III 660,482(3)(4)(5) 12.55%
Michael L. Paxton 111,186(6) 2.11%
Charles A. Casalinova 16,667(7) *
J. Edward Menger 8,334(8) *
All executive officers as a group
(six persons) 1,375,911 26.14%
</TABLE>
- ------------------------------
* Indicates less than one percent.
(1) Tom J. Fatjo, Jr. is President of the General Partner of FFAP, Ltd., and
Fatjo WCA Partners, L.P. In his capacity as President, Mr. Fatjo has voting and
investment power over the assets contained in such partnerships. Includes 83,500
shares owned of record by FFAP, Ltd., and 344,000 shares owned of record by
Fatjo WCA Partners, L.P. Includes 22,371 shares purchasable upon the exercise of
outstanding options that are exercisable within 60 days after April ___, 2000.
(2) Includes 31,871 shares purchasable upon the exercise of outstanding options
and warrants that are exercisable within 60 days after April ___, 2000.
(3) Tom J. Fatjo, III is a co-trustee of the Fatjo Family Trust, which owns
79.2% of the outstanding equity interests of FFAP, Ltd. In his capacity as
co-trustee, Mr. Fatjo shares voting and investment power over the assets of such
trust. Includes 83,500 shares owned of record by FFAP, Ltd. Mr. Fatjo is also
the trustee for six trusts that collectively own 74.25% of the limited
partnership interests of Fatjo WCA Partners, L.P. Includes 344,000 shares owned
of record by Fatjo WCA Partners, L.P.
(4) Includes 13,982 shares purchasable upon the exercise of outstanding options
that are exercisable within 60 days after April ___, 2000.
(5) Includes 19,000 shares purchasable upon the exercise of outstanding warrants
held by FFAP, Ltd. that are immediately exercisable.
(6) Includes 11,186 shares purchasable upon the exercise of outstanding options
that are exercisable within 60 days after April ___, 2000.
(7) Includes 16,667 shares purchasable upon the exercise of outstanding options
that are exercisable within 60 days after April ___, 2000.
(8) Includes 8,334 shares purchasable upon the exercise of outstanding options
that are exercisable within 60 days after April ___, 2000.
23
<PAGE> 27
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain stockholders of Blount Parrish own, in the aggregate, 85,410 shares
and warrants to purchase shares of common stock of WCA Shiloh's parent entity,
WCA.
PLAN OF DISTRIBUTION
Blount Parrish has agreed to purchase the bonds at an aggregate discount of
$__________ from the initial offering price of $___________, pursuant to a
purchase contract entered into between WCA Shiloh and Blount Parrish. This
discount and the public offering price were arrived at by negotiation between
WCA Shiloh and Blount Parrish. Blount Parrish will be obligated to purchase all
of the bonds if any are purchased.
WCA Shiloh has agreed to indemnify Blount Parrish against certain
liabilities or to contribute to any payments required to be made by Blount
Parrish regarding such liabilities, including liabilities under federal
securities laws. Blount Parrish's obligation to accept delivery of the bonds
under the purchase contract is subject to various conditions.
Blount Parrish may offer and sell the bonds to certain dealers (including
dealers depositing the bonds into investment trusts, accounts or funds) and
others at prices lower than the initial public offering price (i.e., prices
involving a "concession" from the public offering price).
DISCLOSURE OF COMMISSION'S POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Section 18-108 of the Delaware Limited Liability Company Act permits WCA
Shiloh, as a Delaware limited liability company, to indemnify any member or
manager or other person from any and all claims, subject only to any
restrictions set forth in WCA Shiloh's limited liability company agreement.
WCA Shiloh's Limited Liability Agreement provides that members and officers
of WCA Shiloh do not have any liability for the obligations or liabilities of
WCA Shiloh, except to the extent provided in the Delaware Limited Liability
Company Act. Further, the members and officers are not personally liable to WCA
Shiloh, and the officers are not liable to WCA, its sole member, for monetary
damages for breach of fiduciary duty, except to the extent provided by
applicable law (1) for any breach of the member's or the officer's duty of
loyalty to WCA Shiloh or its members, (2) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law, or
(3) for any transaction from which the member or officer derived an improper
personal benefit. WCA Shiloh's Limited Liability Agreement provides that former
and current members and officers of WCA Shiloh, and each person who serves or
served at the request of WCA Shiloh as member, director or officer (or
equivalent) of another enterprise, will be indemnified by WCA Shiloh to the
fullest extent permitted under the Delaware Limited Liability Company Act as it
may be in effect from time to time, except as to any action, suit or proceeding
brought by or on behalf of such member or officer of WCA Shiloh without prior
approval of the members.
In addition, the bond purchase agreement between WCA Shiloh and Blount
Parrish regarding the sale of the bonds provides for WCA Shiloh to indemnify
Blount Parrish for certain costs and liabilities it may incur if it is sued in
connection with this offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to director, officers and controlling
persons of WCA Shiloh pursuant to the foregoing provisions or otherwise, WCA
Shiloh has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.
24
<PAGE> 28
LEGAL MATTERS
The legality of the bonds will be passed upon for WCA Shiloh by Mayor Day
Caldwell & Keeton, L.L.P., our outside legal counsel. M. Fredrick Simpler, Jr.,
P.C. will issue certain opinions to his client, Blount Parrish, in connection
with the offering.
EXPERTS
Our audited financial statements have been included in reliance on the
report of Harper & Pearson Company, P.C., our independent accountants, given on
the authority of such firm as experts in auditing and accounting.
25
<PAGE> 29
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Public Accountants...............................................................F-2
Balance Sheet as of December 31, 1999..................................................................F-3
Statements of Operations and Changes in Member's Equity................................................F-4
Statements of Cash Flows...............................................................................F-5
Notes to Financial Statements..........................................................................F-6
</TABLE>
F-1
<PAGE> 30
INDEPENDENT AUDITOR'S REPORT
To the Shareholder and Board of Directors of
WCA Shiloh Landfill, L.L.C.
We have audited the accompanying balance sheet of WCA Shiloh Landfill, L.L.C. -
Successor as of December 31, 1999 and the related statements of operations and
changes in member's equity and cash flows for the four months ended December 31,
1999 and the statements of operations and changes in member's equity and cash
flows of Eastman Brown Holding Company, LLC - Predecessor for the eight months
ended August 31, 1999 and the period from October 19, 1998 (inception) to
December 31, 1998 . These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of WCA Shiloh Landfill, L.L.C. -
Successor at December 31, 1999 and the results of operations and cash flows of
WCA Shiloh Landfill, L.L.C. - Successor for the four months ended December 31,
1999 and of Eastman Brown Holding Company, LLC - Predecessor for the eight
months ended August 31, 1999 and the period from October 19, 1998 (inception) to
December 31, 1998 in conformity with generally accepted accounting principles.
/s/ Harper & Pearson Company, P.C.
Houston, Texas
February 25, 2000
F-2
<PAGE> 31
WCA SHILOH LANDFILL, L.L.C.
BALANCE SHEET
DECEMBER 31, 1999
(IN THOUSANDS)
<TABLE>
ASSETS
CURRENT ASSETS
<S> <C>
Cash and cash equivalents $ 46
Accounts receivable 87
Other current assets 29
-----------
TOTAL CURRENT ASSETS 162
Property and equipment, net of accumulated depreciation 4,292
-----------
TOTAL ASSETS $ 4,454
===========
LIABILITIES AND MEMBER'S EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 45
Accrued interest 160
Current portion of long-term debt 24
Income taxes payable 21
-----------
TOTAL CURRENT LIABILITIES 250
Long-term debt, less current portion 4,053
-----------
TOTAL LIABILITIES 4,303
-----------
COMMITMENTS AND CONTINGENCIES
MEMBER'S EQUITY
Member's equity 86
Retained earnings 65
-----------
TOTAL MEMBER'S EQUITY 151
-----------
TOTAL LIABILITIES AND MEMBER'S EQUITY $ 4,454
===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
F-3
<PAGE> 32
WCA SHILOH LANDFILL, L.L.C.
STATEMENTS OF OPERATIONS AND CHANGES IN MEMBER'S EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
------------------------------------------- -----------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
FROM INCEPTION JANUARY 1, 1999 SEPTEMBER 1, 1999
TO DECEMBER 31, TO AUGUST 31, TO DECEMBER 31,
1998 1999 1999
----------------- ----------------- -----------------
<S> <C> <C> <C>
REVENUE $ 42 $ 521 $ 384
EXPENSES:
Cost of services 45 224 92
Depreciation and amortization 8 40 45
----------------- ----------------- -----------------
OPERATING INCOME (LOSS) (11) 257 247
Interest expense 10 44 161
----------------- ----------------- -----------------
INCOME (LOSS) BEFORE INCOME TAXES (21) 213 86
Provision for income taxes - - 21
----------------- ----------------- -----------------
NET INCOME (LOSS) $ (21) $ 213 $ 65
================= ================= =================
MEMBER'S EQUITY AT INCEPTION $ 23 $ (61) $ -
NET INCOME (LOSS) (21) 213 65
CONTRIBUTED (WITHDRAWN) EQUITY, NET (63) (203) 86
----------------- ----------------- -----------------
MEMBER'S EQUITY AT END OF PERIOD $ (61) $ (51) $ 151
================= ================= =================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
F-4
<PAGE> 33
WCA SHILOH LANDFILL, L.L.C.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
--------------------------------------- ---------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
FROM INCEPTION JANUARY 1, 1999 SEPTEMBER 1,
TO DECEMBER 31, TO 1999 TO
1998 AUGUST 31, 1999 DECEMBER 31,
1999
----------------- ---------------- ---------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (21) $ 213 $ 65
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 8 40 45
Amortization of deferred financing costs 2 7 -
Increase in A/R and other current assets (78) (66) (116)
Increase (decrease) in accounts payable
and accrued expenses (1) 24 192
----------------- ---------------- ---------------
Net cash provided (used ) by operating activities (90) 218 186
----------------- ---------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (370) (28) (4,226)
----------------- ---------------- ---------------
Net cash used by investing activities (370) (28) (4,226)
----------------- ---------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt 597 4 4,000
Member contributions 23 - 251
Member distributions (63) (203) (165)
----------------- ---------------- ---------------
Net cash provided (used) by financing activities 557 (199) 4,086
----------------- ---------------- ---------------
INCREASE IN CASH AND CASH EQUIVALENTS 97 (9) 46
CASH AND CASH EQUIVALENTS:
Beginning of period - 97 -
----------------- ---------------- ---------------
End of period $ 97 $ 88 $ 46
================= ================ ===============
SUPPLEMENTAL DISCLOSURES:
Property and equipment financed by direct debt $ - $ - $ 78
Cash paid for interest $ 4 $ 37 $ 1
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
F-5
<PAGE> 34
WCA SHILOH LANDFILL, L.L.C.
NOTES TO FINANCIAL STATEMENTS
1. BACKGROUND
WCA Shiloh Landfill, L.L.C. (the "Company") is a single-member
Delaware limited liability company, which is wholly owned by Waste
Corporation of America, Inc ("WCA"). The Company was formed June 18, 1999
for the purpose of acquiring the Shiloh Landfill, a construction and
demolition debris ("C&D") landfill located near Travelers Rest, South
Carolina, which was completed effective September 1, 1999. The Company's
operations currently consist of the Shiloh landfill, which primarily serves
the Greenville-Spartanburg, South Carolina market.
The Shiloh landfill is located on an 85.12 acre tract, of which
approximately 20 acres are within the area covered by the Company's current
landfill permit issued by the South Carolina Department of Health and
Environmental Control. The permit allows the Company to accept construction
and demolition ("C&D") debris for disposal at the site. This category of
waste materials includes lumber, bricks and blocks, hardened concrete,
plaster and drywall, shingles and roofing materials, pipes, floor and wall
materials, rocks, tree stumps, brush and limbs and other non-hazardous
materials commonly cleared from construction sites. It may also receive
shredded tires and some other waste materials not necessarily generated by
construction activities. However, most of the waste materials accepted by
the Shiloh landfill are generated in connection with demolition of old
structures and clearing of land for new construction.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation. The Company's financial statements are prepared
in accordance with generally accepted accounting principles. All financial
information presented herein is in thousands of dollars.
The Shiloh landfill was previously owned by Eastman Brown Holding Co.,
LLC ("Predecessor"). The Predecessor financial statements are presented on
a historical basis and exclude the effect of certain assets, which were not
acquired. The acquisition of the Shiloh landfill has been accounted for
under the purchase method of accounting and the successor financial
statements reflect this new basis.
Use of estimates. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during that reported period. Actual results
could differ from those estimates.
Concentrations of credit risk. Financial instruments which potentially
subject the Company to concentrations of credit risk consist principally of
trade receivables and cash. The Company places its cash with high credit
quality financial institutions. Generally, no collateral or other security
is required to support customer receivables. To reduce credit risk, a
customer's credit history is reviewed, where appropriate, before extending
credit. In addition, an allowance for doubtful accounts is established as
needed based upon factors surrounding the credit risk of specific
customers, historical trends and other information. As of December 31,
1999, the allowance for doubtful accounts was $0.
The Predecessor had three major customers that made up 29%, 13% and
11%, respectively, of revenue for the eight month period ended August 31,
1999. The Company had four major customers that made up 20%, 10%, 10% and
10%, respectively, of revenue for the four months ended December 31, 1999.
The Company had three major customers that made up 18%, 18% and 14%,
respectively, of the accounts receivable balance as of December 31, 1999.
Revenue recognition. The company recognizes revenue upon the receipt
and acceptance of construction and demolition debris at its landfill.
Direct costs associated with these operations are expensed as incurred.
F-6
<PAGE> 35
Cash and cash equivalents. Cash and cash equivalents are defined as
cash and short-term, highly liquid deposits with maturity dates of less
than 90 days.
Property and equipment. Property and equipment is recorded at cost.
Capitalized landfill costs, which include direct costs incurred to obtain
landfill permits and to improve the sites, are being amortized based upon
the utilization of available airspace. Expenditures for major additions and
improvements are capitalized and maintenance and repairs are charged to
expense as incurred. When property is retired or disposed of, the related
cost and accumulated depreciation are removed from the accounts, and any
resulting gain or loss is reflected in income.
The landfill is stated at cost and amortized ratably using the
units-of-production method over the estimated useful life of the site as
airspace of the landfill is consumed. Where the Company believes permit
expansion is probable, the expansion airspace and the projected costs
related to developing the expansion airspace is included in the airspace
amortization rate calculation. Factors which help the Company determine if
permit expansion is probable include but are not limited to: (i) positive
financial and operational impact, (ii) local regulatory and political
issues, (iii) legal right to permit land included in expansion, and (iv)
the extent to which the permit application process has proceeded. Landfill
amortization rates are determined periodically (not less than annually)
based on estimates provided by the Company's engineers and accountants.
Landfill costs include expenditures for the acquisition of land and related
airspace, engineering and permitting costs, direct site improvement costs
and capitalized interest. Landfill amortization rate calculations consider
information provided by aerial and ground surveys and other density
measures.
For financial reporting purposes, the Company calculates depreciation
using the straight-line method. Estimated useful lives are as follows:
<TABLE>
<CAPTION>
ESTIMATED LIVES
(IN YEARS)
------------------
<S> <C>
Landfills (see above)
Vehicles and equipment 3 - 8
Buildings 25
Furniture, fixtures and other office equipment 3
</TABLE>
The Company reviews its long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. When the estimated undiscounted future cash
flows are less than the carrying value of an asset, an impairment loss is
recognized. The impairment loss is measured as the amount by which the
carrying amount exceeds the fair value of the asset (assets to be held and
used) or fair value less cost to sell (assets to be disposed of). The fair
value is typically calculated by discounting the asset's expected future
cash flow.
Financial instruments. The carrying values of cash and cash
equivalents and trade receivables and payables approximate fair value due
to the relatively short period to maturity of these instruments. Similarly,
the fair value of the Company's long-term debt is estimated to approximate
current value due to the relatively short period to maturity and interest
rates anticipated on similar third party debt.
Income taxes. The Company accounts for income taxes under the
liability method. Under the liability method, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying values of existing
assets and liabilities and their respective tax basis based on enacted tax
rates.
New accounting pronouncements. The Company adopted the American
Institute of Certified Public Accountants Statement of Position 98-5,
Accounting for the Costs of Start-Up Activities ("SOP 98-5"). SOP 98-5
requires all costs of start-up activities to be expensed as incurred.
Start-up activities are defined as those one-time activities related to
opening a new facility, introducing a new product or service, conducting
business in a new territory, conducting business with a new class of
customer or beneficiary,
F-7
<PAGE> 36
initiating a new process in an existing facility, or commencing some new
operation. The impact of SOP 98-5 was not material to the Company's
financial statements.
In June 1998, the Financial Accounting Standard Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities ("SFAS No. 133"). SFAS No.
133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and derivatives used for hedging purposes. SFAS No. 133 requires
that entities recognize all derivative financial instruments as either
assets or liabilities in the statement of financial position and measure
those instruments at fair value. SFAS No. 133 is effective for the Company
in 2001 as deferred by SFAS 137. Management believes that the adoption of
SFAS No. 133 will have no material impact on the Company's financial
statements.
3. ACQUISITION
Effective September 1, 1999, the Company purchased the Shiloh
landfill, a construction and demolition debris landfill located near
Travelers Rest, South Carolina, from Eastman Brown Holding Co. LLC. Total
consideration consisted of $4,050,000 cash. An additional $500,000 shall be
paid upon the issuance of an expansion permit with a minimum expansion
capacity of 740,000 cubic yards. The transaction was an asset purchase
accounted for using the purchase method. Consistent with industry practice,
excess purchase price is allocated to the permit or underlying airspace and
amortized as available airspace is utilized.
Set forth below are unaudited pro forma combined revenue and income
data reflecting the pro forma effect of the Shiloh landfill as if the
transaction was effective from the inception of the landfill (in
thousands).
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1998 1999
--------------- ---------------
<S> <C> <C>
Revenue $ 42 $ 905
============== ==============
Net loss $ (87) $ (20)
============== ==============
</TABLE>
Pro forma adjustments included in the amounts above primarily relate
to (a) adjustment to depreciation and amortization expense due to the
purchase price allocation, (b) adjustment to interest expense for loans
paid off by the seller at closing and the loan from WCA, and (c) an
effective income tax (benefit) rate of 24%. The pro forma results presented
above are not necessarily indicative of actual results which might have
occurred had the operations and management of the Company and the Shiloh
landfill been combined at the beginning of the period presented.
F-8
<PAGE> 37
4. PROPERTY AND EQUIPMENT
The major categories of property and equipment are as follows (in
thousands):
<TABLE>
<CAPTION>
DECEMBER 31, 1999
------------------
<S> <C>
Landfill $ 4,189
Vehicles and equipment 139
Buildings 7
Furniture and fixtures 2
------------------
4,337
Less: accumulated depreciation (45)
------------------
$ 4,292
==================
</TABLE>
5. LONG-TERM DEBT
Long-term debt at December 31, 1999 consists of a note payable due to
WCA in the amount of $4,000,000, accruing interest at an annual rate of
12%, due September 1, 2002, or earlier, if the Company is able to place
other financing. Accrued interest at December 31, 1999 related to this debt
was $160,000.
Also included in long-term debt at December 31, 1999 was certain
equipment financing, in the original amount of $79,500 bearing interest at
a rate of 9.75%, payable in monthly installments of $2,526.62 through
November 2002, collateralized by related equipment.
The Company has an irrevocable standby letter line of credit in the
amount of $30,000 with a financial institution. The letter of credit is
automatically renewed on December 31 each year for a fee of $600. The
letter of credit may be cancelled by the financial institution provided
written confirmation of cancellation is given to the Company within 120
days of the expiration date. The letter of credit is payable to the Bureau
of Solid and Hazardous Waste in the event the Company is unable or does not
provide adequate closure activities. See further discussion in Note 7.
Future maturities of long-term debt as of December 31, 1999, were as
follows (in thousands):
<TABLE>
YEARS ENDING
DECEMBER 31,
---------------------------
<S> <C>
2000 $ 24
2001 27
2002 4,026
--------------------
$ 4,077
====================
</TABLE>
6. INCOME TAXES
The Company's provision for income taxes is determined by applying the
Company's effective income tax rate to pre-tax financial reporting income.
As of December 31, 1999, no book-tax differences existed and accordingly,
no deferred tax asset or liability has been recorded. The Company intends
to file a consolidated income tax return with its parent yet calculates
income taxes for financial reporting purposes as if it filed a separate
return.
No provision for income taxes is included in the predecessor's
financial statements as the predecessor operated as an LLC, with taxable
income flowing through to the respective members' tax returns.
F-9
<PAGE> 38
The table below reconciles the Company's statutory income tax
provision to its effective income tax provision (in thousands).
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1999
--------------------
<S> <C>
Statutory federal tax provision $ 18
State income taxes and other 3
--------------------
Effective tax provision $ 21
====================
</TABLE>
7. COMMITMENTS AND CONTINGENCIES
Environmental matters and regulation. The Company is subject to
numerous rules and regulations at the federal, state and local levels. The
Company has not experienced any regulatory problems in the past and
believes that it is in compliance with all applicable rules and
regulations. No assurance can be given that future changes in the law will
not have an adverse impact on the Company's operations. The Company's
business generally requires certain operating permits in order to conduct
its operations. The Company believes it is in material compliance with its
operating permit.
Limited environmental impairment liability insurance. The Company is
subject to potential liability for any environmental damage its facility
may cause, particularly as a result of the contamination of water or soil.
The Company, through its parent, WCA, maintains $5 million of environmental
impairment liability insurance, limited to $1 million per occurrence,
covering both the sudden and gradual onset of environmental damage (subject
to a $50,000 deductible). There can be no assurance that liabilities that
may be incurred by the Company will be covered by the insurance or that the
dollar amount of such liabilities, which are covered by its insurance, will
not exceed the Company's policy limit. As a result, if the Company were to
incur liability for environmental damage, its financial condition could be
adversely affected.
Closure and post-closure costs. The Company has financial obligations
relating to closure and possibly post-closure costs for the Shiloh
landfill. While the precise amount of these future obligations cannot be
determined, the Shiloh landfill does not currently require post-closure
monitoring and the majority of the closure activity will occur as a part of
regular operations.
The Company adopted the American Institute of Certified Public
Accountants Statement of Position 96-1, Environmental Remediation
Liabilities ("SOP 96-1"). SOP 96-1 provides that environmental remediation
liabilities should be accrued when the criteria of the FASB Statement of
Financial Accounting Standards No. 5, Accounting for Contingencies ("SFAS
No. 5"), are met. SOP 96-1 also provides that the accrual for such
liabilities should include future costs for those employees expected to
devote a significant amount of time directly to the management of
remediation liabilities.
The Company will provide accruals based on engineering estimates as
the available airspace is utilized, however, at this time believes the
aggregate accrual required upon closure of the facility to be less that
$50,000. The estimate of future liability is subject to change as it is
based on current economic conditions, operational results, and regulations
currently in effect. As of December 31, 1999, the Company has provided a
letter of credit in the amount of $30,000 to the state regulatory authority
to collateralize the obligation.
8. RELATED PARTY TRANSACTIONS
The Predecessor paid approximately $165,000 to companies owned by the
Predecessor's members for equipment and services related to the improvement
of the landfill from inception through the period ended August 31, 1999.
The Predecessor paid approximately $42,000 to vendors of a company owned by
the Predecessor's members during the period ended August 31, 1999. These
amounts have been excluded from the Predecessor's statement of operations
for the related period.
F-10
<PAGE> 39
The Company received landfill disposal fees during September and
October 1999, of approximately $17,000 from a company owned by a former
consultant of WCA. No amounts remained outstanding as of December 31, 1999.
The Company has a note in the amount of $4,000,000 payable to WCA. For
the four month period ended December 31, 1999, interest expense of $160,000
had been recorded and is included in the related statement of operations.
See Note 5 on Long-Term Debt.
F-11
<PAGE> 40
========================================================
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
Where You Can Find More Information.................
Dealer Prospectus Delivery Obligation...............
Prospectus Summary..................................1
Bondholders' Risks..................................2
Use of Proceeds.....................................6
Market Area Information.............................6
Determination Of Offering Price.....................6
Capitalization......................................7
Summary Financial Information.......................8
Management's Discussion and Analysis of
Financial Condition and Results of Operations...9
The Shiloh Landfill................................12
Description of the Bonds...........................14
The Indenture......................................16
Ratings............................................19
Certain Tax Considerations - Original Issue
Discount........................................19
Legal Proceedings..................................20
Management.........................................21
Stock Ownership of Management and Certain
Stockholders.......................................22
Certain Relationships and Related Transactions.....24
Plan of Distribution...............................24
Disclosure Commission's Position On
Indemnification for Securities Act Liabilities..24
Legal Matters......................................25
Experts............................................25
Index of Financial Statements.....................F-1
Independent Auditor's Report......................F-2
Assets............................................F-3
Liabilities and Member's Equity...................F-3
Notes to Financial Statements.....................F-6
</TABLE>
========================================================
========================================================
WCA SHILOH LANDFILL,
L.L.C.
$5,000,000 SENIOR
SECURED BONDS
-----------------
PROSPECTUS
-----------------
BLOUNT PARRISH & COMPANY
INCORPORATED
APRIL , 2000
========================================================
<PAGE> 41
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 18-108 of the
Delaware Limited Liability Company Act permits WCA Shiloh, as a Delaware limited
liability company, to indemnify and hold harmless any member or manager or other
person from and against any and all claims and demands whatsoever, subject to
such standards and restrictions as are set forth in WCA Shiloh's limited
liability company agreement.
WCA Shiloh's Limited Liability Agreement provides that members and officers
of WCA Shiloh shall not have any liability for the obligations or liabilities of
WCA Shiloh, except to the extent provided in the Delaware Limited Liability
Company Act. Further, the members and officers shall not be personally liable to
WCA Shiloh or the members for monetary damages for breach of fiduciary duty as a
member or officer, except to the extent provided by applicable law (1) for any
breach of the member's or the officer's duty of loyalty to WCA Shiloh or its
members, (2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, or (3) for any transaction
from which the member or officer derived an improper personal benefit. WCA
Shiloh's Limited Liability Agreement provides that former and current members
and officers of WCA Shiloh, and each person who serves or served at the request
of WCA Shiloh as member, director or officer (or equivalent) of another
enterprise, shall be indemnified by WCA Shiloh to the fullest extent permitted
under the Delaware Limited Liability Company Act as it may be in effect from
time to time, except as to any action, suit or proceeding brought by or on
behalf of such member or officer of WCA Shiloh without prior approval of the
members.
In addition, the bond purchase agreement between WCA Shiloh and Blount
Parrish regarding the sale of the bonds provides for WCA Shiloh to indemnify
Blount Parrish for certain costs and liabilities it may incur if it is sued in
connection with this offering.
ITEM 2. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. WCA Shiloh estimates
that legal expenses will approximate $100,000, accounting fees will approximate
$20,000, printing expenses will approximate $10,000, and trustees fees will
approximate $5,000. Registration fees should be about $5,000.
ITEM 3. UNDERTAKINGS. Except as set forth herein, none of the undertakings
under Item 512 of Regulation S-B apply to this registration.
(a) For determining liability under the Securities Act of 1933, WCA Shiloh
hereby undertakes to treat the information omitted from the form of prospectus
filed as part of this registration statement in reliance on Rule 430A and
contained in the form of prospectus filed by WCA Shiloh under Rule 424(b)(1) or
(4) or 497(h) under the Act as part of this registration statement as of the
time the Securities and Exchange Commission declared it effective.
(b) For determining liability under the Act, WCA Shiloh hereby undertakes
to treat each post-effective amendment that contains a new prospectus as a new
registration statement for the securities offered, and the offering of the
securities at that time to be the initial bona fide offering of those
securities.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officer and controlling
persons of WCA Shiloh pursuant to the foregoing provisions, or otherwise, WCA
Shiloh has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by WCA of expenses incurred or
paid by a director, officer or controlling person of WCA Shiloh in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, WCA Shiloh will, unless in the opinion of its counsel the matter has
been finally determined by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
ITEM 4. UNREGISTERED SECURITIES ISSUED OR SOLD WITHIN ONE YEAR. The only
securities issued by WCA Shiloh in the previous year without registration under
the Securities Act of 1933, as amended, were the membership interests issued by
it to its parent company, WCA, upon formation of WCA Shiloh.
II-1
<PAGE> 42
ITEMS 5 AND 6. INDEX TO EXHIBITS AND DESCRIPTION OF EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION EDGAR EXHIBIT NUMBER
<S> <C> <C>
1 Bond Purchase Contract EX-1
2(a) Articles of Organization, including Amendment EX-2.(i)
2(b) Limited Liability Agreement EX-2.(ii)
3 Trust Indenture EX-3
8 Purchase and Sale Agreement EX-8
10(a) Consent of independent accountants EX-10.a
10(b) Consent of legal counsel (included in the opinion filed
as Exhibit 11)
11 Opinion re legality EX-11
</TABLE>
II-2
<PAGE> 43
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing Form SB-1 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Houston
and State of Texas on March 17, 2000.
Registrant: WCA Shiloh Landfill, L.L.C.
By: /s/ Jerome M. Kruszka
-----------------------------------
Jerome M. Kruszka
Title: President
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
By: /s/ Charles A. Casalinova
-----------------------------------
Charles A. Casalinova
Title: Chief Financial Officer and
Principal Accounting
Officer
Date: March 17, 2000
Waste Corporation of America, Inc., sole
member of WCA Shiloh Landfill, L.L.C.,
a member-managed Delaware limited
liability company
By: /s/ Tom J. Fatjo, Jr.
-----------------------------------
Tom J. Fatjo, Jr.
Title: Chairman and Chief Executive
Officer
Date: March 17, 2000
II-3
<PAGE> 44
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION EDGAR EXHIBIT NUMBER
<S> <C> <C>
1 Bond Purchase Contract EX-1
2(a) Articles of Organization, including Amendment EX-2.(i)
2(b) Limited Liability Agreement EX-2.(ii)
3 Trust Indenture EX-3
8 Purchase and Sale Agreement EX-8
10(a) Consent of independent accountants EX-10.a
10(b) Consent of legal counsel (included in the opinion filed _
as Exhibit 11)
11 Opinion re legality EX-11
</TABLE>
<PAGE> 1
EXHIBIT 1
PURCHASE CONTRACT
PURCHASE CONTRACT dated March __, 2000 between WCA SHILOH LANDFILL, L.L.C,
("WCA") and BLOUNT PARRISH & COMPANY, INCORPORATED (the "Underwriter").
1. BACKGROUND.
(a) WCA proposes to issue and sell its $5,000,000 Senior Secured Bonds (the
"Bonds"). The Bonds will be issued to provide financing of general
operating expenses and working capital needs, and to repay advances made by
WCA's parent corporation, Waste Corporation of America, which advances were
used to fund the acquisition by WCA of a construction and demolition debris
landfill, known as the Shiloh Landfill, located in the Greenville, South
Carolina area (the said landfill and all other property acquired in
connection therewith being herein together called the "Project"). The Bonds
will be issued under and secured by a Trust Indenture dated as of March 1,
2000 (the "Indenture"), between WCA and Regions Bank, Montgomery, Alabama,
as Trustee (the said bank, together with its successors in trust, being
herein called the "Trustee.
(b) WCA proposes to sell the Bonds to the Underwriter and the Underwriter
proposes to offer the Bonds for resale, in reliance on the representations,
covenants and indemnities herein set forth. WCA has joined in this Purchase
Contract in order to induce the Underwriter to enter into the same and to
sell and purchase the Bonds under the terms herein set forth.
(c) WCA has heretofore caused to be prepared a Preliminary Prospectus (the
"Preliminary Prospectus"), and a definitive Prospectus dated ___________
__, 2000 (the "Prospectus"), which pertains to the Bonds. WCA hereby
approves and ratifies the use of the Preliminary Prospectus by the
Underwriter before the date hereof and its use of the Prospectus after the
date thereof, in connection with the resale of the Bonds. The terms and
conditions of the Bonds (including without limitation, the maturities, the
interest rates and the provisions for the redemption thereof prior to their
respective maturities) shall be as described in the Prospectus. The
Prospectus has been filed as part of WCA's registration statement with the
Securities and Exchange Commission (the "SEC") pursuant to the Securities
Act of 1933 (the "Registration Statement"). The Registration Statement is
effective, and WCA has received no notice from the SEC that its approval of
the Registration Statement has been withdrawn.
(d) The attorneys referred to in this Purchase Contract are:
Counsel for WCA:
Mayor, Day, Caldwell & Keeton, LLP
Houston, Texas
Counsel for the Underwriter:
M. Fredrick Simpler, Jr., P.C.
Montgomery, Alabama
<PAGE> 2
2. PURCHASES, SALE AND CLOSING.
Subject to the terms and conditions and in reliance on the representations,
warranties and covenants herein set forth, the Underwriter hereby agrees to
purchase all of the Bonds from WCA, and WCA hereby agrees to sell all of the
Bonds to the Underwriter, at a price of $_______________ (which price reflects
an underwriting discount of $_________, original issue discount of $___________
and accrued interest to, but not including the date of the Closing as
hereinafter defined of $__________). The sale and purchase of the Bonds shall
take place at a Closing (the "Closing"), which shall take place at 9:00 AM,
Central time, on ________ __, 2000, or on such other date or at such other time
as may be agreed on by WCA and the Underwriter, at the offices of counsel to
WCA, or at such other place, as shall be mutually agreeable to WCA and the
Underwriter. At the Closing, WCA will deliver to the Underwriter, or cause to be
delivered, the Bonds in definitive form, duly executed and authenticated, in
authorized denominations requested by the Underwriter, together with the other
documents herein required; and the Underwriter will accept delivery and pay the
purchase price of the Bonds in immediately available funds. If at the Closing
WCA fails to deliver the Bonds to the Underwriter as provided herein, or if at
the Closing any of the conditions specified in Section 8 hereof shall not have
been fulfilled to the satisfaction of the Underwriter, the Underwriter may elect
to be relieved of any further obligations under this Purchase Contract without
thereby waiving any other rights the Underwriter may have by reason of such
failure or non-fulfillment.
3. OFFERING; UNDERWRITER'S COVENANTS.
The Underwriter agrees to make an offering of all of the Bonds at not in excess
of 100% of the face value thereof.
The Underwriter has full power and authority under the laws of the State of
Alabama to enter into this Purchase Contract, and when executed and delivered,
this Purchase Contract will be a legal, valid and binding obligation of the
Underwriter enforceable in accordance with its terms. The Underwriter covenants
to offer and sell the Bonds in accordance with all applicable federal and state
laws including federal securities laws and the securities laws of each state in
which the Bonds are sold.
Not later than the Closing, the Underwriter will execute and deliver to WCA a
certificate or other document or instrument pursuant to which the Underwriter
represents and covenants to WCA factual matters reasonably necessary in order
for WCA to compute the amount, if any, of original issue discount to be included
as interest in its reports filed with the Internal Revenue Service.
4. WCA'S REPRESENTATIONS AND WARRANTIES.
WCA makes the following representations and warranties to the Underwriter:
(a) WCA is a duly organized and validly existing limited liability company
and is in good standing under the laws of the State of South Carolina and
qualified to do business in the State of South Carolina. WCA has the power
and authority to own its properties and assets and to carry on its
businesses as now being conducted and is duly qualified to do business in
every jurisdiction wherein the failure to qualify would have a material
adverse effect on WCA or its business (including, without limitation, the
State of South Carolina). WCA has all requisite power to enter into this
Purchase Contract and to consummate the transactions contemplated hereby.
(b) WCA has duly authorized all actions for the execution and delivery of
the Indenture, the Bonds and this Purchase Contract and has taken all
actions necessary or appropriate to insure that such documents, when
executed and delivered by WCA, will constitute valid and legally binding
obligations
2
<PAGE> 3
of WCA, enforceable in accordance with their terms, except to the extent
that their enforceability may be limited by bankruptcy, insolvency or other
laws affecting creditors' rights generally.
(c) With respect to the information concerning WCA, the Project, the Bonds,
the use of the proceeds of the Bonds, the Indenture, the Prospectus
(including all reports, documents or financial statements referred to in
the Prospectus) was and is, and all times subsequent hereto up to and
including the date of the Closing will be, true, correct and complete in
all material respects, and does not and will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(d) The Indenture and the Bonds conform in all material respects to the
descriptions thereof contained in the Prospectus.
(e) The execution and delivery of this Purchase Contract, the Indenture and
the Bonds and the compliance by WCA with the provisions hereof and thereof,
do not and will not conflict with or constitute by WCA a violation of,
breach of or default under (i) the Certificates of Organization or
Operating Agreement of WCA, (ii) any indenture, mortgage, deed of trust,
lease, note agreement or other agreement or instrument to which WCA is a
party or by which WCA is bound, or (iii) any constitutional provision or
statute or any order, rule, or regulations of any court or governmental
agency or body having jurisdiction over WCA or any of its activities or
property; and all consents, approvals, authorizations, and orders of
governmental or regulatory authorities which are required in connection
with the execution, delivery and performance by WCA of this Purchase
Contract, the Indenture and the Bonds has been duly obtained and remain in
full force and effect.
(f) There is no action, suit, proceeding, inquiry or investigation, at law
or in equity, before or by any court, public board or body, known to be
pending or threatened against or affecting the company nor to the best of
the knowledge of WCA is there any basis therefor, wherein an unfavorable
decision, ruling or finding would materially adversely affect the
transaction contemplated by this Purchase Contract or by the Prospectus or
would, in any way, adversely affect the validity or enforceability of the
Bonds, the Indenture, this Purchase Contract or any agreement or instrument
to which WCA is a party and which is used or contemplated for use in the
consummation of the transactions contemplated by this Purchase Contract or
by the Prospectus
(g) The Securities and Exchange Commission has not issued and, to the best
of WCA's knowledge, is not threatening to issue, any order preventing or
suspending the use of the Prospectus.
(h) Neither WCA nor anyone acting on its behalf has, directly or
indirectly, offered the Bonds or any similar securities of WCA in
connection with the Project for sale to, or solicited any offer to buy the
same from, anyone other than the Underwriter.
5. WCA'S COVENANTS.
WCA will faithfully perform and comply with the following covenants:
(a) WCA will indemnify and hold harmless the Underwriter and its directors
and officers and each person, if any, who controls the Underwriter within
the meaning of Section 15 of the Securities Act of 1933, as amended, or
Section 20 of the Securities Exchange Act of 1934, as amended, against any
and all losses, claims, damages, expenses of liabilities, joint or several,
to which they or any of them may
3
<PAGE> 4
become subject under any statute or at common law or otherwise, and, except
as hereinafter provided, WCA will reimburse the Underwriter and each such
director or officer and each such controlling persons, if any, for any
reasonable legal or other expense incurred by them in connection with
investigating or defending any actions, whether or not resulting in any
liability, insofar as such losses, claims, damages, expenses, liabilities
or actions (i) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus or
(ii) arise out of or are based upon the omission or alleged omission to
state in that part of the Prospectus a material fact required to be stated
therein or necessary in order to make the statements made therein not
misleading in light of the circumstances under which they are made.
Promptly after receipt of notice of the commencement of any action in
respect of which indemnity may be sought against WCA under this section,
the indemnifiable party will notify WCA in writing of the commencement
thereof, and, subject to the provisions hereinafter stated, WCA shall
assume the defense of such action: (including the employment of counsel,
who shall be counsel satisfactory to WCA or the Underwriter or such
indemnifiable person) shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall not be at the expense of WCA unless the
employment of such counsel has been specifically authorized by WCA. WCA
shall not be liable to indemnify any person for any settlement of any such
action effected without its consent. Any provisions of this section to the
contrary notwithstanding, WCA shall in no event be obligated to indemnify
or hold the Underwriter harmless against any loss or liability unless the
Underwriter furnishes or causes to be furnished a final Prospectus to each
person purchasing any of the bonds from the Underwriter, or in the event
the loss or liability results from any information provided by the
Underwriter to WCA in connection with its offering of the Bonds.
(b) WCA will notify the Underwriter of any material adverse change in the
business, properties or financial condition of WCA occurring before the
Closing or within six (6) months thereafter which would require a change in
the Prospectus, or in the Appendices thereto in order to make the
representations and warranties set forth in Section 5(c) hereof true and
correct.
(c) WCA will refrain from taking or omitting to take any action if such
action or omission would in any way cause the proceeds from the sale of the
Bonds to be applied in a manner contrary to that provided for in the
Indenture, as in effect from time to time.
(d) WCA will cooperate in qualifying the Bonds for offer and sale under the
securities laws of any jurisdiction of the United States designated by the
Underwriter, provided that WCA will not be required to qualify to do
business or consent to service of process in any state or jurisdiction
other than the State of South Carolina.
(e) WCA will pay all expenses and costs incident to the authorization,
issuance, printing, sale and delivery, as the case may be, of the Bonds,
the Indenture, the Prospectus and this Purchase Contract, including without
limitation, (i) fees and expenses of any counsel employed by the
Underwriter in connection with the qualification of the Bonds for sale
under the securities laws of various jurisdictions; (ii) the preparation of
any Blue Sky and legal investment memoranda; (iii) all filing, registration
and recording fees and expenses; (iv) Trustee's fees and expenses; (v) fees
and expenses of Underwriter's counsel and counsel to WCA; and (vi) the fees
and expenses of the Underwriter. The obligation of WCA to make payments
provided herein shall apply whether or not the Bonds are delivered by and
on behalf of WCA or the Underwriter, unless such delivery shall be
prevented by the default of the Underwriter hereunder.
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<PAGE> 5
(f) Anything herein to the contrary notwithstanding, the provisions of
subparagraph (d) and clauses (i) and (ii) of subparagraph (e) of this
section shall apply only to the initial sale of the Bonds by the
Underwriter.
6. CONDITIONS OF UNDERWRITER'S OBLIGATION.
The Underwriter's obligation to purchase and pay for the Bonds as provided
herein is subject to the fulfillment of the following conditions at or before
Closing:
(a) The Prospectus, the Indenture, the Bonds and this Purchase Contract
shall have each been duly authorized, executed and delivered by the
respective parties thereto, in substantially the form heretofore approved
by the Underwriter, with only such changes therein as the Underwriter, WCA
and the Trustee shall mutually agree upon, and the registration of the
Bonds with the SEC and any states as determined by the Underwriter shall be
effective;
(b) The Bonds shall have been duly authorized, executed and authenticated
in accordance with the provisions of the Indenture;
(c) The Underwriter shall have received the following documents:
(i) Executed counterparts of the Indenture;
(ii) The opinions dated as of the date of closing of (A) Counsel for
WCA and (C) Counsel for the Underwriter, each such opinion to cover
such matters and to be in such form as shall be satisfactory to the
Underwriter;
(iii) A certificate or certificates, dated the date of the Closing,
signed by duly authorized member of WCA and in form and substance
satisfactory to the Underwriter, to the effect that:
(A) As of the Closing, the representations and warranties of WCA
contained in Section 4 hereof are true, accurate and complete in
all material respects and WCA has complied with its covenants and
agreements required in this Purchase Contract to be complied with
at or prior to the Closing;
(B) There is no action or proceeding pending or threatened
looking toward the dissolution or liquidation of WCA;
(C) The execution and delivery by WCA of the Indenture, the Bonds
and this Purchase Contract have been duly authorized and there
shall be attached to said certificate appropriate resolutions of
WCA in which such authorization was given;
(D) There has been no material adverse change in the business,
property or financial condition of WCA as described in the
Prospectus, and except as provided for or contemplated herein or
described in the Prospectus, WCA has not incurred any material
liabilities other than in the ordinary course of business;
(E) The member of WCA executing the certificates required by this
Section 6 has examined the Prospectus, and, in his opinion, with
respect to WCA , the Project and the use of bond proceeds,
neither the Prospectus nor any of the appendices thereto
5
<PAGE> 6
includes any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(iv) Such additional opinions, certificates, instruments and other
documents as the Underwriter or its counsel may reasonably require to
evidence compliance with applicable law; the truth and accuracy, as of
the time of the Closing, of the representations and warranties of WCA
contained herein and in the Prospectus; the performance or
satisfaction by WCA of all agreements to be performed and all
conditions to be satisfied by them; and the validity of the Bonds, the
Indenture, and this Purchase Contract.
7. EVENTS PERMITTING UNDERWRITER TO TERMINATE.
The Underwriter shall have the right to cancel and terminate their obligations
under this Purchase Contract at any time before the Closing if any of the
following occurs:
(a) A stop order, ruling, regulation or Prospectus by or on behalf of the
Securities and Exchange Commission shall be issued or made to the effect
that the issuance, offering or sale of the Bonds, or of obligations of the
general character of the Bonds as contemplated hereby, is in violation of
any provisions of the Securities Act or 1933, as amended, or the Trust
Indenture Act of 1939, as amended; or
(b) (i) Any restriction on, or general suspension of trading in securities
on the New York Stock Exchange or any banking moratorium, or the
establishment by the New York Stock Exchange, by the Securities and
Exchange Commission, by any federal or state agency, or by decision of any
court, or any limitation on prices for such trading, (ii) any outbreak of
hostilities or other national or international calamity or crisis, the
effect of which on the financial markets of the United States shall be such
as to make it impracticable, in the reasonable judgment of the Underwriter,
for the Underwriter to enforce contracts for the sale of Bonds, or (iii) a
fire, flood, accident or other calamity resulting in a substantial loss to
WCA which renders it impracticable, in the reasonable judgment of the
Underwriter, to consummate the sale of the Bonds and the delivery of the
Bonds by the Underwriter at the initial offering price; or
(c) Any event or condition which, in the judgment of the Underwriter,
renders untrue or incorrect, in any material respect as of the time the
same purports to speak, the information contained in the Preliminary
Prospectus or the Prospectus, in the Appendices thereto, or in any of the
reports, documents or financial statements referred to in the said
Appendices, or which requires that information not reflected in the
Preliminary Prospectus or the Prospectus, in the said Appendices or in said
reports, documents or financial statements should be reflected therein in
order to make the statements therein not misleading in any material respect
as of such time; provided that WCA and the Underwriter will use their best
efforts to amend or supplement the Preliminary Prospectus, the Prospectus,
the Appendices thereto or the reports, documents and financial statements
and projections referred to in the said Appendices so as to reflect
therein, to the satisfaction of the Underwriter, any information needed to
make the Preliminary Prospectus, the Prospectus, the said Appendices and
said reports, documents and financial statements and projections not
misleading.
6
<PAGE> 7
8. NOTICES AND OTHER ACTIONS.
All notices, demands and formal actions hereunder will be in writing, mailed,
telegraphed or delivered to:
(a)If to WCA:
WCA Shiloh Landfill, LLC
c/o Waste Corporation of America, Inc.
One Riverway, Suite 1400
Houston, Texas 77056
(b)If to the Trustee:
Regions Bank
60 Commerce Street, 2nd Floor
Montgomery, Alabama 36104
Attention: Corporate Trust Administration
(c)If to the Underwriter:
Blount Parrish & Company, Incorporated
Post Office Box 5212
Montgomery, Alabama 36103
Attention: William B. Blount
9. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS.
All representations, warranties and agreements of WCA contained herein shall
remain operative and in full force and shall survive (a) the execution and
delivery of this Purchase Contract, (b) any investigation made by or on behalf
of the Underwriter, (c) the purchase of the Bonds hereunder and (d) any
disposition of or payment for the Bonds.
10. COUNTERPARTS.
This Purchase Contract may be executed in any number of counterparts with each
executed counterpart constituting an original but all of which together shall
constitute one and the same instrument.
11. SUCCESSORS, GOVERNING LAW.
This Purchase Contract will inure to the benefit of any be binding upon the
parties hereto and their successors, and will not confer any rights upon any
other person (except other persons specifically entitled to the benefit of the
indemnity provisions contained in Section 4 hereof). This Purchase Contract
shall be governed by and construed in accordance with the laws of the State of
Alabama.
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<PAGE> 8
IN WITNESS WHEREOF, WCA and the Underwriter have caused this Purchase Contract
to be executed in their respective corporate names by their duly authorized
officers and have caused this Purchase Contract to be dated March __, 2000.
BLOUNT PARRISH & COMPANY, INCORPORATED
- --------------------------------------
By:
-----------------------------------
Its duly authorized representative
WCA SHILOH LANDFILL, LLC
By: WASTE CORPORATION OF AMERICA, INC.
Its Sole Member
- --------------------------------------
By: Tom J. Fatjo, Jr.
Its Chief Executive Officer
8
<PAGE> 1
EXHIBIT 2.(i)
CERTIFICATE OF FORMATION
OF
WCA OF SOUTH CAROLINA, L.L.C.
The undersigned, being over the age of 18 years and acting as sole
organizer of a limited liability company under the Delaware Limited Liability
Company Act (the "Act"), does hereby adopt the following Certificate of
Formation for WCA of South Carolina, L.L.C. (the "Company").
ARTICLE ONE
The name of the limited liability company is WCA of South Carolina,
L.L.C.
ARTICLE TWO
The address of the initial registered office of the Company in the
State of Delaware is c/o 1209 Orange Street, Wilmington, Delaware, 19801, and
the name of its registered agent for service of process required to be
maintained by Section 18-104 of the Act in the state is The Corporation Trust
Company.
ARTICLE THREE
The adoption by the members of the Company of the Limited Liability
Company Agreement ("LLC Agreement") of the Company shall bind all of the members
of the Company existing from time to time to the terms and provisions of such
LLC Agreement (as such terms and provisions may be restated or amended as
provided therein), and the purchase of or subscription for membership interests
in the Company shall constitute an agreement by any such member to be so bound,
notwithstanding that any such member has not executed a counterpart of such LLC
Agreement or of any such restatements of or amendments to such LLC Agreement.
ARTICLE FOUR
The name of the sole organizer is George C. Jones, and the address of
the organizer is 700 Louisiana Street, Suite 1900, Houston, Texas 77002.
IN WITNESS WHEREOF, I have hereunder set my hand this 18th day of June,
1999.
-------------------------------
George C. Jones, Organizer
<PAGE> 2
CERTIFICATE OF AMENDMENT TO CERTIFICATE OF FORMATION
OF
WCA OF SOUTH CAROLINA, L.L.C.
WCA of South Carolina, L.L.C. (hereinafter called the "company"), a
limited liability company organized and existing under and by virtue of the
Limited Liability Company Act of the State of Delaware, does hereby certify:
1. The name of the limited liability company is WCA Shiloh Landfill,
L.L.C.
2. The certificate of formation of the company is hereby amended by
striking out Article One thereof and substituting in lieu of said Article the
following new Article:
"ARTICLE ONE
The name of the limited liability company is WCA Shiloh Landfill,
L.L.C."
Executed on this 2nd day of March, 2000.
WASTE CORPORATION OF AMERICA, INC.,
Sole Member
------------------------------------
By:
--------------------------------
Its:
--------------------------------
<PAGE> 1
EXHIBIT 2.(ii)
LIMITED LIABILITY COMPANY AGREEMENT
OF
WCA OF SOUTH CAROLINA, L.L.C.
This Limited Liability Company Agreement of WCA of South Carolina,
L.L.C. (this "Agreement"), is entered into by Waste Corporation of America,
Inc., a Delaware corporation, as the member (referred to herein, together with
any person who hereafter becomes a member of the company pursuant to Section 21
below, as the "Members").
The Members hereby form a limited liability company pursuant to and in
accordance with the Delaware Limited Liability Company Act (6 Del. Code
Section 18-101, et seq.), as amended from time to time (the "Act"), and hereby
agree as follows:
1. Name. The name of the limited liability company formed hereby is WCA
of South Carolina, L.L.C. (the "Company").
2. Purpose. The purpose and business of the Company shall be the
transaction of any and all business for which limited liability companies may be
organized under the Act.
3. Foreign Qualification. Prior to the Company's conducting business in
any jurisdiction other than Delaware, the Members shall cause the Company to
comply, to the extent procedures are available and those matters are reasonably
within the control of the Members, with all requirements necessary to qualify
the Company as a foreign limited liability company in such other jurisdiction.
At the request of the Members, each Member shall execute, acknowledge, swear to,
and deliver all certificates and other instruments conforming with this
Agreement that are necessary or appropriate to qualify, continue or terminate
the Company as a foreign limited liability company in all jurisdictions in which
the Company may conduct business.
4. Term. The term of the Company shall begin upon the filing of the
Certificate of Formation (the "Certificate") with the Office of the Secretary of
State of the State of Delaware and shall continue in existence in perpetuity
unless terminated pursuant to Section 12 of this Agreement.
5. Powers. (a) The Company shall have all of the powers permitted to
limited liability companies under the Act.
(b) Notwithstanding the foregoing provisions of this Section 5, the
Company shall have no power or authority, without the written approval of
Members holding at least two-thirds (2/3) of the Percentage Interests (as
defined below), to amend or terminate this Agreement.
6. Depositories. All funds of the Company shall be deposited from time
to time to the credit of the Company in such banks or other depositories as the
Members may from time to
<PAGE> 2
time designate, and upon such terms and conditions as shall be fixed by the
Members. The Members may from time to time authorize the opening and maintaining
with any such depository as it may designate of general and special accounts,
and may make such special rules and regulations with respect thereto as the
Members may deem expedient.
7. Registered Office. The address of the registered office of the
Company in the State of Delaware is c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
8. Registered Agent. The name and address of the registered agent of
the Company for service of process on the Company in the State of Delaware is
The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801.
9. Members. The name and the mailing addresses of each Member is as
follows:
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
Waste Corporation of America, Inc. One Riverway, Suite 1400
Houston, Texas 77056
</TABLE>
10. Management. (a) The business and affairs of the Company shall be
managed by the Members. The Members shall have the power to do any and all acts
necessary or convenient to or for the furtherance of the purposes described
herein, including all powers, statutory or otherwise, possessed by members under
the laws of the State of Delaware. Each Member is hereby designated as an
authorized person, within the meaning of the Act, to execute, deliver and file
the Certificate (and any amendments or restatements thereof), and the Company is
hereby designated as an authorized person to deliver and file any other
certificates (and any amendments or restatements thereof) necessary for the
Company to qualify to do business in a jurisdiction in which the Company may
wish to conduct business. Each member shall have the authority without the act
of any other Member to bind the Company as to third parties.
(b) (i) Meetings of the Members may be called by the
Secretary, and shall be called by the Secretary upon the
written request of any Member, or, if the Secretary fails to
act, may be called by any Member. The call shall state the
location of the meeting and the nature of the business to be
transacted. Notice of any such meeting shall be given to all
Members not less than two days nor more than twenty (20) days
prior to the date of such meeting. Attendance and
participation at a meeting, except to protest the adequacy of
notice thereof, shall constitute a waiver of any claim of
inadequacy of notice of such matter. Members may vote in
person or by proxy at such meeting. Whenever a vote, consent
or approval of Members is permitted or required under this
Agreement, such vote, consent or approval may be given at a
meeting of Members or may be given in accordance with the
procedure prescribed in subsection (v) of this Section 10(b).
Each Member shall be entitled to cast one vote on each matter
submitted for vote. Except as otherwise expressly provided in
this Agreement, the unanimous vote of the Members shall be
required to constitute the act or approval of the Members.
2
<PAGE> 3
(ii) For the purpose of determining the Members
entitled to vote at any meeting of the Members or any
adjournment thereof or to act by written consent pursuant to
Subsection (v) of this Section 10(b), the Secretary or the
Member requesting such meeting or consent may fix, in advance,
a date as the record date for any such determination. Such
date shall not be more than thirty (30) days nor less than ten
(10) days before any such meeting or the date of request for
such consent. If no such record date is so fixed, the date of
the meeting or the date of request for consent, as the case
may be, shall be the record date.
(iii) Each Member may authorize any person to act for
him/her/it by proxy on all matters in which a Member is
entitled to participate, including waiving notice of any
meeting, or voting or participating at a meeting. Every proxy
must be signed by the Member or its attorney-in-fact. No proxy
shall be valid after the expiration of eleven (11) months from
the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Member
executing it.
(iv) Each meeting of Members shall be conducted by
the Member requesting such meeting or by such other person
that the Member requesting such meeting may designate. If no
person is so designated, the President shall conduct the
meeting.
(v) The Members may take any action contemplated
under this Agreement as approved by the unanimous written
consent of the Members.
11. Officers. (a) The Members may from time to time appoint persons to
serve as officers of the Company, including a President, one or more Vice
Presidents, a Secretary, one or more Assistant Secretaries, a Treasurer, one or
more Assistant Treasurers and a Controller and to exercise such authority as is
provided below. Any number of offices may be held by the same person. Each
officer shall serve until the first to occur of the appointment by the Members
of his or her successor or his or her death, resignation or removal from office
by the Members. The authority of the officers shall not be exclusive of, and
shall be subject to, the authority of the Members.
(b) (i) Powers and Duties of the President. Unless
otherwise determined by the Members, the President shall be
the chief executive and operating officer of the Company and
shall have the usual duties of an executive officer with
general supervision over and direction of the business,
property and affairs of the Company and its several officers.
In the exercise of these duties and subject to the limitations
of the laws of the State of Delaware, this Agreement, and the
actions of the Members, he or she may appoint, suspend and
discharge employees and agents. He or she shall also do and
perform such other duties as from time to time may be assigned
to him or her by the Members. Unless otherwise determined by
the Members, the President shall have full power and authority
on behalf of the Company to attend and to act and to vote at
any meeting of the
3
<PAGE> 4
stockholders of any corporation in which the Company may hold
stock, and, at any such meetings, shall possess and may
exercise any and all the rights and powers incident to the
ownership of such stock which, as the owner thereof, the
Company might have possessed and exercised.
(ii) Powers and Duties of the Secretary. Unless
otherwise determined by the Members, the Secretary shall
record all proceedings of the meetings of the Members and all
committees thereof in books to be kept for that purpose, and
shall attend to the giving and serving of all notices for the
Company. He or she shall have charge of the corporate seal,
the Company's membership and Member Percentage Interest
records, and such other books and papers as the Members may
direct. He or she shall perform all other duties ordinarily
incident to the office of the Secretary and shall have such
other powers and perform such other duties as may, from time
to time, be assigned to him or her by the Members.
(iii) Powers and Duties of the Treasurer. Unless
otherwise determined by the Members, the Treasurer shall have
charge of all the funds and securities of the Company which
may come into his or her hands. When necessary or proper,
unless otherwise ordered by the Members, he or she shall
endorse for collection on behalf of the Company checks, notes
and other obligations, and shall deposit the same to the
credit of the Company in such banks or depositories as the
Members may designate and shall sign all receipts and vouchers
for payment made to the Company. He or she shall sign all
checks made by the Company except when the Members shall
otherwise direct. He or she shall enter regularly, in books of
the Company to be kept by him or her for the purpose, full and
accurate account of all monies received and paid by him or her
on account of the Company. Whenever required by the Members,
he or she shall render a statement of the financial condition
of the Company. He or she shall at all reasonable times
exhibit his or her books and accounts to any Member, upon
application at the office of the Company during business
hours. He or she shall have such other powers and shall
perform such other duties as may be assigned to him or her
from time to time by the Members. He or she shall give such
bond for the faithful performance of his or her duties as
shall be required by the Members, and any such bond shall
remain in the custody of the President.
(iv) Powers and Duties of Vice Presidents and
Assistant Officers. Unless otherwise determined by the
Members, each Vice President and each assistant officer shall
have the powers and perform the duties of his or her
respective superior officer. Vice Presidents and assistant
officers shall have such rank as shall be designated by the
Members and each, in the order of rank, shall act for such
superior officer in his or her absence, or upon his or her
disability or when so directed by such superior officer or by
the Members. Vice Presidents may be designated as having
responsibility for a specific aspect of the Company's affairs,
in which event each such Vice President shall be superior to
the other Vice Presidents in relation to matters within his or
her aspect. The President shall be the superior officer of the
Vice Presidents. The Treasurer and the Secretary
4
<PAGE> 5
shall be the superior officers of the assistant treasurers and
assistant secretaries, respectively.
(v) Powers and Duties of the Controller. The
Controller shall be the assistant financial officer of the
Company. His or her duties shall be to aid the Treasurer of
the Company, particularly in connection with, but not limited
to, internal auditing practices and procedures, company
accounts and accounting, operating procedures and format,
standardization of corporate forms and procedures, and
monitoring corporate expenses. The Controller shall have such
other powers and duties as may be assigned to him or her from
time to time by the Members.
(c) The Members shall have the power to fill any vacancies in any
office occurring for any reason. Any officer may resign at any time by
submitting his or her written resignation to the Company. Such resignation shall
take effect at the time of its receipt by the Company, unless another time be
fixed in the resignation, in which case it shall become effective at the time so
fixed. The acceptance of a resignation shall not be required to make it
effective.
12. Dissolution. The Company shall dissolve, and its affairs shall be
wound up upon the first to occur of the following: (a) the written consent of
the Members, (b) the death, retirement, resignation, expulsion, bankruptcy or
dissolution of a Member or the occurrence of any other event which terminates
the continued membership of a Member in the Company, unless the business of the
Company is continued with the consent of all of the remaining Members within
ninety (90) days following the occurrence of such event, or (c) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.
13. Capital Contributions. (a) The Members have contributed the
following amounts, in cash or other property, to the Company (the value of any
contributed property being hereby agreed upon, together with any contributed
cash, as the following amount), which amounts shall be the initial balances of
the capital accounts of the Members:
Waste Corporation of America, Inc. $1,000.00
(b) The initial percentage interests ("Percentage Interests") of the
Members in the Company shall be as follows:
Waste Corporation of America, Inc. 100%
(c) A Member has no interest in specific Company property.
14. Additional Contributions. No Member is required to make any
additional capital contribution to the Company.
15. Capital Accounts. The Company will establish a capital account for
each Member and will maintain each account according to the following rules:
5
<PAGE> 6
(a) The company will maintain the capital accounts in accordance with
United States Department of the Treasury Regulation 1.704-1(b).
(b) If the Company liquidates itself or a Member's Percentage Interest,
the Company will make liquidating distributions in accordance with Section 18
hereof.
(c) No Member shall be liable to fund any deficit in such Member's
capital account at any time; provided, however, that if a Member receives an
adjustment allocation or distribution described in United States Department of
the Treasury Regulation 1.704-l(b)(2)(ii)(d)(4), (5) or (6) and this adjustment
results in a deficit capital account, items of income and gain will be allocated
to that Member to eliminate the deficit balance in order to meet the "qualified
income offset" requirements of United States Department of the Treasury
Regulation 1.704-1(b)(2)(ii)(d).
16. Tax Matters. (a) The Members acknowledge that the Company will be
treated as a "partnership" for federal and Delaware state tax purposes. All
provisions of this Agreement shall be construed so as to preserve that tax
status.
(b) Waste Corporation of America, Inc. shall act on behalf of the
Company as the "tax matters partner" within the meaning of Section 6231(a)(7) of
the Internal Revenue Code of 1986, as amended (the "Code"). The tax matters
partner designation may be changed by the unanimous vote of the Members.
(c) The tax matters partner of the Company shall cause all federal and
state income tax returns and all other federal, state or local tax returns
required to be filed by the Company to be prepared and filed on behalf of the
Company on a timely basis.
(d) The tax matters partner of the Company shall cause the Company to
make timely elections with respect to tax matters. Such elections shall include,
but shall not be limited to, (i) an election to use the accrual method of
accounting, (ii) an election to deduct R&D costs under Section 174(a) of the
Code, (iii) an organization fee amortization election under Section 709(b) of
the Code, (iv) a Code Section 754 election if requested by a Member, and (v) any
allocation method permitted under United States Department of the Treasury
Proposed Regulation 1.704-1(c).
17. Allocation of Profits and Losses; Tax Allocations. (a) Except as
provided in Section 15(c) above and Section 17(b) below, the Company's profits
and losses shall be allocated to the Members each calendar year according to
their respective Percentage Interests.
(b) Income, gain, loss and deduction solely for federal income tax
purposes shall be allocated to the Members in accordance with Section 704(c) of
the Code to take into account any variation between the adjusted tax basis of
any property and its initial contribution value.
18. Distributions. (a) Subject to Section (b) below, distributions
shall be made to the Members at the times and in the aggregate amounts
determined by the Members. Such
6
<PAGE> 7
distributions shall be allocated among the Members based on the Members'
respective Percentage Interests.
(b) At the termination of the Company, and after the Company has
satisfied or provided for the satisfaction of all the Company's debts and other
obligations, the Company's assets will be distributed in cash or in kind (i)
first, in discharge of the Members' respective negative capital account
balances, if any, and (ii) then, based on the Members' respective Percentage
Interests.
19. Assignments. A Member may not assign in whole or in part any
interest in the Company.
20. Resignation and Expulsion. A Member may resign from the Company
without the approval of the Members. A Member may not be expelled, except for
breach of this Agreement or as otherwise provided by the Act, without the vote
of Members holding at least three-fourths (3/4) of the Percentage Interests.
21. Admission of Additional Members. One or more additional members of
the Company may be admitted to the Company upon the approval of the Members.
22. Liability of Members and Officers. The Members and the officers of
the Company shall not have any liability for the obligations or liabilities of
the Company except to the extent provided in the Act. A Member or officer shall
not be personally liable to the Company or the Members for monetary damages for
breach of fiduciary duty as a Member or officer, except to the extent provided
by applicable law (i) for any breach of the Member's or the officer's duty of
loyalty to the Company or its Members, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law, or
(iii) for any transaction from which the Member or officer derived an improper
personal benefit. Each person who is or was a Member or officer of the Company,
and each person who serves or served at the request of the Company as member,
director or officer (or equivalent) of another enterprise, shall be indemnified
by the Company to the fullest extent permitted under the Act as it may be in
effect from time to time, except as to any action, suit or proceeding brought by
or on behalf of such Member or officer of the Company without prior approval of
the Members.
23. Governing Law. This Agreement shall be governed by, and construed
under, the laws of the State of Delaware, all rights and remedies being governed
by said laws.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound
hereby, have duly executed this Limited Liability Company Agreement as of the
18th day of June, 1999.
WASTE CORPORATION OF AMERICA, INC.
By:
-------------------------------
Name:
Title:
7
<PAGE> 1
EXHIBIT 3
TRUST INDENTURE
BETWEEN
WCA SHILOH LANDFILL, L.L.C.
AND
REGIONS BANK, MONTGOMERY, ALABAMA
AS TRUSTEE
------------------------
SECURING:
$5,000,000
SENIOR SECURED BONDS
------------------------
DATED AS OF
, 2000
----------------
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TABLE OF CONTENTS
<TABLE>
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GRANTING CLAUSES..................................................................................................1
ARTICLE I. DEFINITIONS..........................................................................................3
SECTION 1.1. Definitions............................................................................3
SECTION 1.2. Interpretation.........................................................................7
SECTION 1.3. Captions and Headings..................................................................8
ARTICLE II. AUTHORIZATION AND TERMS OF SENIOR BONDS..............................................................9
SECTION 2.1. Authorized Amount of Senior Bonds......................................................9
SECTION 2.2. Issuance of Senior Bonds...............................................................9
SECTION 2.3. Maturity and Interest..................................................................9
SECTION 2.4. Delivery of the Senior Bonds...........................................................9
SECTION 2.5. Form of Senior Bonds..................................................................10
SECTION 2.6. Execution and Authentication of Senior Bonds..........................................10
SECTION 2.7. Source of Payment of Senior Bonds.....................................................10
SECTION 2.8. Payment and Ownership of Senior Bonds.................................................10
SECTION 2.9. Transfer and Exchange of Senior Bonds.................................................11
SECTION 2.10. Mutilated, Lost, Wrongfully Taken or Destroyed Senior Bonds...........................12
SECTION 2.11. Cancellation of Senior Bonds..........................................................13
ARTICLE III. REDEMPTION OF SENIOR BONDS..........................................................................14
SECTION 3.1. Terms of Redemption of Senior Bonds...................................................14
SECTION 3.2. Issuer's Election to Redeem...........................................................16
SECTION 3.3. Notice of Redemption..................................................................16
SECTION 3.4. Payment of Redeemed Senior Bonds......................................................17
ARTICLE IV. PROVISIONS AS TO FUNDS AND PAYMENTS.................................................................19
SECTION 4.1. Senior Bond Fund......................................................................19
SECTION 4.2. Investment of Senior Bond Fund.......................................................19
SECTION 4.3. Moneys to be Held in Trust............................................................20
SECTION 4.4. Nonpresentment of Senior Bonds........................................................20
SECTION 4.5. Repayment to the Issuer from the Senior Bond Fund.....................................20
ARTICLE V. THE TRUSTEE.........................................................................................21
SECTION 5.1. Acceptance of Trust...................................................................21
SECTION 5.2. Fees, Charges and Expenses of Trustee, Registrar and Paying Agents....................23
SECTION 5.3. Intervention by Trustee...............................................................24
SECTION 5.4. Successor Trustee.....................................................................24
SECTION 5.5. Appointment of Co-Trustee.............................................................24
SECTION 5.6. Resignation by the Trustee............................................................25
SECTION 5.7. Removal of the Trustee................................................................25
SECTION 5.8. Appointment of Successor Trustee......................................................25
SECTION 5.9. Adoption of Authentication............................................................27
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SECTION 5.10. Registrars............................................................................27
SECTION 5.11. Designation and Succession of Paying Agents...........................................28
SECTION 5.12. Dealing in Senior Bonds...............................................................29
SECTION 5.13. Representations and Covenants of Trustee..............................................29
ARTICLE VI. DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND HOLDERS..............................................30
SECTION 6.1. Defaults; Events of Default...........................................................30
SECTION 6.2. Notice of Default.....................................................................30
SECTION 6.3. Acceleration..........................................................................31
SECTION 6.4. Other Remedies; Rights of Holders.....................................................31
SECTION 6.5. Appointment of Receivers..............................................................32
SECTION 6.6. Right of Holders to Direct Proceedings................................................32
SECTION 6.7. Application of Moneys.................................................................32
SECTION 6.8. Remedies Vested in Trustee............................................................33
SECTION 6.9. Rights and Remedies of Holders........................................................33
SECTION 6.10. Termination of Proceedings............................................................34
SECTION 6.11. Waivers of Events of Default..........................................................34
ARTICLE VII. SUPPLEMENTAL INDENTURES.............................................................................36
SECTION 7.1. Supplemental Indentures Generally.....................................................36
SECTION 7.2. Supplemental Indentures Not Requiring Consent of Holders..............................36
SECTION 7.3. Indentures Requiring Consent of Holders...............................................37
SECTION 7.4. Authorization to Trustee; Effect of Supplement........................................38
SECTION 7.5. Opinion of Counsel....................................................................39
SECTION 7.6. Modification by Unanimous Consent.....................................................39
ARTICLE VIII. DEFEASANCE..........................................................................................40
SECTION 8.1. Release of Indenture..................................................................40
SECTION 8.2. Payment and Discharge of Senior Bonds.................................................40
SECTION 8.3. Survival of Certain Provisions........................................................41
ARTICLE IX. COVENANTS AND AGREEMENTS OF THE ISSUER..............................................................42
SECTION 9.1. Covenants and Agreements of the Issuer................................................42
SECTION 9.2. Observance and Performance of Covenants, Authority and Actions........................42
SECTION 9.3. Enforcement of Issuer's Obligations...................................................43
SECTION 9.4. Priority of Pledge....................................................................43
SECTION 9.5. Maintenance, Repairs, Changes, Alterations, Taxes and Other Charges...................43
SECTION 9.6. Sale of Landfill Prohibited Except Under Certain Conditions...........................44
SECTION 9.7. Freedom of Landfill from Prior Liens..................................................44
SECTION 9.8. Payment of Trustee Charges............................................................44
SECTION 9.9. To Record and to Grant Further Assurances.............................................44
SECTION 9.10. Insurance Required....................................................................45
SECTION 9.11. Maintenance of Corporate Existence; Consolidation or Merger...........................46
SECTION 9.12. Disposition of Condemnation Award.....................................................47
</TABLE>
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ARTICLE X. MEETINGS OF HOLDERS.................................................................................48
SECTION 10.1. Purposes of Meetings..................................................................48
SECTION 10.2. Call of Meetings......................................................................48
SECTION 10.3. Voting................................................................................48
SECTION 10.4. Meetings..............................................................................49
SECTION 10.5. Miscellaneous.........................................................................49
ARTICLE XI. MISCELLANEOUS.......................................................................................50
SECTION 11.1. Limitation of Rights..................................................................50
SECTION 11.2. Severability..........................................................................50
SECTION 11.3. Notices...............................................................................50
SECTION 11.4. Suspension of Mail....................................................................51
SECTION 11.5. Payments Due on Saturdays, Sundays and Holidays.......................................51
SECTION 11.6. Instruments of Holders................................................................51
SECTION 11.7. Priority of this Indenture............................................................52
SECTION 11.8. Extent of Covenants; No Personal Liability............................................52
SECTION 11.9. Binding Effect........................................................................52
SECTION 11.10. Counterparts..........................................................................52
SECTION 11.11. Governing Law.........................................................................52
</TABLE>
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TRUST INDENTURE
THIS TRUST INDENTURE (the "Indenture") dated as of March ___, 2000, by
and between WCA SHILOH LANDFILL, L.L.C., a Delaware limited liability company
(the "Issuer"), and REGIONS BANK, Montgomery, Alabama, a [STATE BANKING
CORPORATION,] duly organized, existing and authorized to accept and execute
trusts of the character herein set out under and by virtue of the laws of the
State of Alabama, with a corporate trust office located in Montgomery, Alabama
as trustee (the "Trustee");
W I T N E S S E T H
WHEREAS, by virtue of its authority set forth in its articles of
incorporation and bylaws, and by action duly taken by its board of directors,
the Issuer is empowered to issue the bonds hereinafter described; and
WHEREAS, the Issuer proposes to issue its Senior Secured Bonds (the
"Senior Bonds"), in the aggregate principal amount of $5,000,000 for the
purpose of financing the general operating expenses and working capital needs
of Shiloh Landfill, a construction and demolition-type landfill located near
Travelers Rest, South Carolina (the "Landfill"), as well as for other
authorized corporate purposes; and
WHEREAS, the execution and delivery of this Indenture and the issuance
of the bonds under this Indenture pursuant to the aforesaid authority have been
in all respects duly and validly authorized by a resolution adopted by the
Board of Directors of the Issuer; and
WHEREAS, the Issuer has contracted for the private placement of the
Senior Bonds to be issued in the aggregate principal amount of $5,000,000; and
WHEREAS, the Senior Bonds will be secured by this Indenture, and the
Issuer is authorized to execute and deliver this Indenture and to do or cause
to be done all acts provided or required herein and to issue the Senior Bonds
in the form as provided herein with such omissions and insertions as permitted
or required by this Indenture; and
WHEREAS, all things necessary to make the Senior Bonds, when
authenticated by the Trustee and issued as provided in this Indenture, the
valid, binding and legal obligations of the Issuer, and to constitute this
Indenture a valid assignment and pledge of the amounts assigned and pledged to
the payment of the principal of, and premium, if any, and interest on, the
Senior Bonds have been done and performed, and the creation, execution and
delivery of this Indenture, and the creation, execution and issuance of the
Senior Bonds, subject to the terms hereof, have in all respects been duly
authorized; and
WHEREAS, the Trustee has accepted the trusts created by this
Indenture, and in evidence thereof, has joined in the execution hereof;
GRANTING CLAUSES
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that to secure the payment
of Bond Service Charges on the Senior Bonds according to their true intent and
meaning, to secure
<PAGE> 6
the performance and observance of all of the covenants, agreements, obligations
and conditions contained therein and herein, and to declare the terms and
conditions upon and subject to which the Senior Bonds are and are intended to
be issued, held, secured and enforced, and in consideration of the premises and
the acceptance by the Trustee of the trusts created herein and of the purchase
and acceptance of the Senior Bonds by the Holders, and for other good and
valuable consideration, the receipt of which is acknowledged, the Issuer has
executed and delivered this Indenture and absolutely assigns hereby to the
Trustee, and to its successors in trust, and its and their assigns, all right,
title and interest of the Issuer in and to the following (herein the "Trust
Estate"):
GRANTING CLAUSE FIRST
All moneys and securities from time to time held by the Trustee under
the terms of this Indenture and any and all other real or personal property of
every name and nature from time to time hereafter by delivery or by writing of
any kind conveyed, mortgaged, pledged, assigned or transferred, as and for
additional security hereunder (including the real property and improvements at
the Landfill) by the Issuer or by anyone on its behalf, or with its written
consent to the Trustee, which is hereby authorized to receive any and all such
property at any and all times and to hold and apply the same subject to the
terms hereof.
GRANTING CLAUSE SECOND
All the rights and interest of the Issuer in and to the Bond Fund (as
hereinafter defined), and all moneys and investments therein, but subject to
the provisions of this Indenture pertaining thereto, including those pertaining
to the making of disbursements therefrom.
GRANTING CLAUSE THIRD
All right, title and interest of the Issuer in all Pledged Revenues.
TO HAVE AND TO HOLD all and singular the Trust Estate, whether now
owned or hereafter acquired, unto the Trustee and its respective successor in
said trust and assigns forever.
IN TRUST NEVERTHELESS, upon the terms and trust herein set forth for
the equal and proportionate benefit, security and protection of all present and
future owners of the Senior Bonds from time to time issued under and secured by
this Indenture without privilege, priority or distinction as to the lien or
otherwise of any of the Senior Bonds over any of the other Senior Bonds (except
as herein otherwise expressly provided);
PROVIDED, HOWEVER, that if the Issuer, its successors or assigns,
shall well and truly pay, or cause to be paid, the principal of, and premium,
if any, and interest on, the Senior Bonds due or to become due, at the times
and in the manner mentioned in the Senior Bonds according to the true intent
and meaning thereof, and shall cause the payments to be made on the Senior
Bonds as required under Article VIII hereof, or shall provide, as permitted
hereby, for the payment thereof by depositing with the Trustee the entire
amount due or to become due thereon (or Governmental Obligations sufficient for
that purpose as provided in Article VIII hereof), and shall pay or cause to be
paid to the Trustee all sums of money due or to become due to it in accordance
with the terms and provisions thereof, then upon the final payment thereof or
2
<PAGE> 7
provision thereof this Indenture and the rights hereby granted shall cease and
be void; otherwise this Indenture to be and remain in full force and effect.
THIS INDENTURE OF TRUST FURTHER WITNESSETH, and it is expressly
declared that, all Senior Bonds issued and secured hereunder are to be issued,
authenticated and delivered and all property, rights and interest, including,
without limitation, the amounts hereby assigned and pledged, are to be dealt
with and disposed of under, upon and subject to the terms, conditions,
stipulations, covenants, agreements, trusts, uses and purposes as hereinafter
expressed, and Issuer has agreed and covenanted, and does hereby agree and
covenant with the Trustee and with the respective owners of the Senior Bonds as
follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definitions. In addition to the words and terms defined
elsewhere in this Indenture, the words and terms defined in this Section shall
have the meanings herein specified unless the context or use clearly indicates
another or different meaning or intent.
"Authorized Issuer Representative" means the person designated at the
time to act on behalf of the Issuer.
"Authorized Denominations" means $5,000 and any integral multiples
thereof.
"Bond Fund" means the Bond Fund created in Section 4.1 hereof.
"Bond Service Charges" means, for any period or payable at any time,
the principal of, premium, if any, and interest on the Senior Bonds for that
period or payable at that time whether due at maturity or upon acceleration or
redemption.
"Business Day" means a day of the year, other than (a) a Saturday; (b)
a Sunday; (c) a day on which banks located in any city in which the principal
corporate trust office of the Trustee is located are required or authorized by
law to remain closed; or (d) a day on which the New York Stock Exchange and the
Federal Reserve are closed.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time. References to the Code and Sections of the Code include relevant
applicable regulations and proposed regulations thereunder and any successor
provisions to those Sections, regulations or proposed regulations.
"Eligible Investments" means (i) Government Obligations; (ii) Federal
National Mortgage Association's (FNMA) mortgage backed securities and senior
debt obligations which bear interest at a fixed rate and are fully amortizing;
(iii) Federal funds, certificates of deposit, time deposits and bankers'
acceptances (having original maturities of not more than 365 days) of any bank
the unsecured, uninsured and unguaranteed debt obligations of which (or, in the
case of the principal bank in a bank holding company, such debt obligations of
the bank holding company) have been rated "AA" or "A-1+" (or an equivalent) by
S&P or Moody's, or any other
3
<PAGE> 8
comparable rating established by S&P (iv) commercial paper (having original
maturities of not more than 365 days) rated "A-1+" (or an equivalent) by S&P or
Moody's; (v) money market funds investing in and secured solely by obligations
described in (i) above; (vi) deposits which are fully insured by the United
States of America or one of its agencies or instrumentalities; (vii) repurchase
agreements with any institution rated AAA (or an equivalent) by S&P or Moody's;
(viii) obligations of any state of the United States of America or any
political subdivision or other instrumentality of any such state, which are
rated at least "A" (or an equivalent) or its equivalent by S&P or Moody's; and
(ix) an interest in any trust or fund which trust or fund is invested solely in
Federal Securities or repurchase agreements with respect to Federal Securities.
"Event of Default" or "Default" means any occurrence or event
specified in and defined by Section 6.1 hereof.
"Extraordinary Services" and "Extraordinary Expenses" mean all
services rendered and all reasonable expenses properly incurred by the Trustee
under this Indenture, other than Ordinary Services and Ordinary Expenses.
"Fiscal Officer" means the Chief Financial Officer of the Issuer.
"Fiscal Year" means with respect to the Issuer, the period beginning
January 1 of each year and ending December 31 of such year.
"Government Obligations" or "Federal Securities" means obligations of,
or guaranteed as to principal and interest by, the United States or any agency
or instrumentality thereof when such obligations are backed by the full faith
and credit of the United States.
"Holder" or "Holder of a Bond" or "Bondholder" means the Person in
whose name a Bond is registered on the Register.
"Indenture" means this Trust Indenture, as amended or supplemented
from time to time.
"Interest Payment Date" means each date set forth as such in the form
of Senior Bond contained in this Indenture.
"Interest Rate for Advances" means, for the first thirty (30) days
such rate shall be applicable, a rate per annum equal to the Prime Rate, and
thereafter, a rate per annum which is equal to one percent (l%) plus the Prime
Rate.
"Issuance Costs" means the costs and expenses incurred by the Issuer
in connection with the issuance and sale of the Senior Bonds, including
(without limitation) related legal, accounting, financial, printing, recording
and filing fees and expenses, the fees and expenses of the placement agent for
the private placement of the Senior Bonds, the initial charge of the Trustee
relating to the Senior Bonds, and all other costs and expenses incurred by the
Issuer in connection with the issuance and sale of the Senior Bonds.
"Issuer" means WCA Shiloh Landfill, L.L.C., a Delaware limited
liability company, and any successor thereto.
4
<PAGE> 9
"Majority Holders" means the holders of a majority of the outstanding
principal amount of the Senior Bonds
"Maximum Annual Debt Service" means, with respect to the Senior Bonds,
the maximum amount of Bond Service Charges due in any fiscal year of the Issuer
while any of the Senior Bonds remain outstanding.
"Moody's" means Moody's Investors Service, and its successors and
assigns.
"Ordinary Services" and "Ordinary Expenses" means those services
normally rendered, and those expenses normally incurred, by a trustee under
instruments similar to this Indenture.
"Original Purchaser" means, as to the Senior Bonds, the Person or
Persons identified as the purchaser or purchasers in the Purchase Contract.
"Outstanding Senior Bonds," "Bonds outstanding" or "Senior Bonds
outstanding" mean, as of the applicable date, all Senior Bonds which have been
authenticated and delivered, or which are being delivered by the Trustee under
this Indenture, except:
(a) Senior Bonds cancelled upon surrender, exchange or
transfer, or cancelled because of payment or redemption on or prior to
that date;
(b) Senior Bonds, or the portion thereof, for the payment,
redemption or purchase for cancellation of which sufficient money has
been deposited and credited with the Trustee or any Paying Agents
pursuant to this Indenture on or prior to that date for that purpose
(whether upon or prior to the maturity or redemption date of those
Senior Bonds); provided, that if any of those Senior Bonds are to be
redeemed prior to their maturity, notice of that redemption shall have
been given or arrangements satisfactory to the Trustee shall have been
made for giving notice of that redemption, or waiver by the affected
Holders of that notice satisfactory in form to the Trustee shall have
been filed with the Trustee;
(c) Senior Bonds, or the portion thereof, which are deemed to
have been paid and discharged or caused to have been paid and
discharged pursuant to the provisions of this Indenture; and
(d) Senior Bonds in lieu of which others have been
authenticated under Section 2.10 of this Indenture;
provided that, for purposes of voting or giving any consent, any Bond owned by
the Issuer shall not be deemed to be outstanding hereunder.
"Paying Agent" means any bank or trust company designated as a Paying
Agent by or in accordance with Section 5.11 of this Indenture.
"Permitted Encumbrances" means as of any particular time:
(a) liens for ad valorem taxes, public improvement
assessments or other governmental charges not then delinquent;
5
<PAGE> 10
(b) pledges or deposits to secure obligations under workmen's
compensation or similar laws, including liens of judgments thereunder
that are not currently dischargeable;
(c) pledges or deposits to secure performance in connection
with bids, tenders, contracts (other than contracts for the payment of
money) or leases made in the ordinary course of business to which the
Issuer is a party;
(d) pledges or deposits to secure public or statutory
obligations of the Issuer;
(e) inchoate materialmen's, mechanics', suppliers', vendors'
or other similar liens if payment is not delinquent under the contract
giving rise to such lien, or deposits to obtain the release of any
such liens;
(f) liens resulting from any litigation, legal proceeding or
judgment that is currently being contested in good faith by
appropriate proceedings (provided that execution thereon is
effectively superseded or stayed), and pledges or deposits to secure,
or in lieu of, any surety, stay or appeal bond with respect to any
such litigation, legal proceeding or judgment;
(g) leases made, or existing on property acquired, in the
ordinary course of business;
(h) statutory landlord's liens and the other rights of the
lessor under any lease to which the Issuer is a party as lessee;
(i) zoning restrictions, easements, licenses and restrictions
on the use of or with respect to real property, and minor
irregularities in title thereto, that do not, in the opinion of the
Issuer, materially impair the use of such property in the operation of
the business of the Issuer or the value of such property for the
purpose of such business;
(j) pledges or deposits to enable the Issuer to maintain
self-insurance or to participate in any self-insurance pools or
trusts;
(k) liens on money deposited by customers or others with the
Issuer as security for, or as prepayment of, the cost of services to
be rendered by the Issuer;
(l) liens or charges on Pledged Revenues for the benefit of
obligations that the Issuer is permitted, by the provisions of
Indenture, to issue or incur;
(m) the Indenture and the Forms UCC-1 relating to the
Landfill; and
(n) utility, access and other easements and rights-of-way,
mineral rights, restrictions and exceptions that will not materially
interfere with or impair the operations being conducted in or about
the Landfill.
"Person" or words importing persons mean firms, associations,
partnerships (including without limitation, general and limited partnerships),
joint ventures, societies, estates, trusts, corporations, public or
governmental bodies, other legal entities and natural persons.
6
<PAGE> 11
"Pledged Revenues" or "Revenues" means all accounts receivable, rents,
receipts, issues and profits derived by the Issuer from the operation or
ownership of the Landfill to which the Issuer may be entitled, including but
not limited to all commercial receipts derived from commercial operation of the
Landfill, such as waste disposal fees, tipping fees and all other moneys to
which the Issuer may be entitled.
"Predecessor Bond" of any particular Senior Bond means every previous
Senior Bond evidencing all or a portion of the same debt as that evidenced by
the particular Bond. For the purposes of this definition, any Senior Bond
authenticated and delivered under Section 2.10 of this Indenture in lieu of a
lost, stolen or destroyed Senior Bond shall, except as otherwise provided in
Section 2.10, be deemed to evidence the same debt as the lost, stolen or
destroyed Senior Bond.
"Prime Rate" means the interest rate per annum established by the
Trustee from time to time as such bank's prime commercial rate based on its
consideration of economic, money market, business and competitive factors, and
is not necessarily such bank's most favored rate. Subject to any minimum or
maximum rate limitations specified by applicable law, the Prime Rate will
automatically and immediately change from time to time effective as of the
effective date of each such change in the prime commercial rate of such bank.
"Record Date" means, with respect to any Senior Bond, the fifteenth
day of the month immediately preceding an Interest Payment Date applicable to
that Senior Bond.
"Register" means the books kept and maintained by the Registrar for
registration and transfer of Senior Bonds pursuant to Section 2.9 hereof.
"Registrar" means, as to the Senior Bonds, Regions Bank, until a
successor Registrar shall have become such pursuant to applicable provisions of
this Indenture; each Registrar shall be a transfer agent registered in
accordance with Section 17(A)(c) of the Securities Exchange Act of 1934.
"S&P" means Standard & Poor's Corporation, a corporation organized
under the laws of the State of Delaware, and its successors and assigns.
"Senior Bonds" means the Senior Secured Bonds authorized to be issued
hereunder.
"State" means the State of Alabama.
"Supplemental Indenture" means any indenture supplemental to this
Indenture entered into between the Issuer and the Trustee in accordance with
Article VII hereof.
"Trustee" means the Trustee at the time acting as such under the
Indenture, originally Regions Bank, Montgomery, Alabama and any successor
Trustee as determined or designated under or pursuant to the Indenture.
SECTION 1.2. Interpretation. Any reference herein to the Issuer or to
any officer thereof includes entities or officials succeeding to their
respective functions, duties or
7
<PAGE> 12
responsibilities pursuant to or by operation of law or who are lawfully
performing their functions.
Unless the context indicates otherwise, words importing the singular
number include the plural number, and vice versa. The terms "hereof," "hereby,"
"herein," "hereto," "hereunder," "hereinafter" and similar terms refer to this
Indenture; and the term "hereafter" means after, and the term "heretofore"
means before, the date of this Indenture. Words of any gender include the
correlative words of the other genders, unless the sense indicates otherwise.
SECTION 1.3. Captions and Headings. The captions and headings in this
Indenture are solely for convenience of reference and in no way define, limit
or describe the scope or intent of any Articles, Sections, subsections,
paragraphs, subparagraphs or clauses hereof.
(End of Article I)
8
<PAGE> 13
ARTICLE II.
AUTHORIZATION AND TERMS OF SENIOR BONDS
SECTION 2.1. Authorized Amount of Senior Bonds. No Senior Bonds may be
issued under the provisions of this Indenture except in accordance with this
Article. The total authorized principal amount of Senior Bonds which shall be
issued under the provisions of this Indenture is $5,000,000.
SECTION 2.2. Issuance of Senior Bonds. It is determined to be
necessary to, and the Issuer shall, issue, sell and deliver $5,000,000
principal amount of Senior Bonds, in order, together with other funds to be
provided by the Issuer, to finance the general operating expenses and working
capital needs of the Landfill. The Senior Bonds shall be designated "Senior
Secured Bonds"; the Senior Bonds shall be issuable, unless a supplemental
indenture shall have been executed and delivered pursuant to Section 7.2(h)
hereof, only in fully registered form, substantially as set forth in Exhibit A
to this Indenture; shall be numbered in such manner as determined by the
Trustee in order to distinguish each Senior Bond from any other Senior Bond;
and shall be in the denominations of $5,000 and any integral multiple thereof.
The Senior Bonds shall be initially dated as of ________________ ___, 2000.
Upon any exchange or transfer and surrender of any Senior Bond in accordance
with the provisions hereof, the Issuer shall execute and the Trustee shall
authenticate and deliver one or more new Senior Bonds in exchange therefor as
provided herein. Any such new Senior Bond shall be dated, if authenticated
prior to the first Interest Payment Date, as of the date of the Senior Bonds
initially delivered hereunder, and otherwise, as of the Interest Payment Date
next preceding the date of its authentication, except that if authenticated on
an Interest Payment Date, it shall be dated as of such date of authentication;
provided that if at the time of authentication interest thereon is in default,
it shall be dated as of the date to which interest has been paid.
SECTION 2.3. Maturity and Interest. The Senior Bonds shall mature on
______________________, 2020 and shall bear interest at a rate of _______%
payable on each Interest Payment Date, commencing July 1, 2000, and continuing
until the entire principal sum of $5,000,000 is paid. Interest shall be
calculated on a 360-day year, 30-day month basis.
SECTION 2.4. Delivery of the Senior Bonds. Upon the execution and
delivery of this Indenture, and satisfaction of the conditions established by
the Issuer and in the Purchase Contract for delivery of the Senior Bonds, the
Issuer shall execute the Senior Bonds and deliver them to the Trustee.
Thereupon, the Trustee shall authenticate the Senior Bonds and deliver them to,
or on the order of, the Original Purchaser thereof, as directed by the Issuer
in accordance with Section 2.6.
Before the Trustee delivers any Senior Bonds, the Trustee shall have
received a request and authorization to the Trustee on behalf of the Issuer,
signed by an Authorized Issuer Representative, to authenticate and deliver the
Senior Bonds to, or on the order of, the Original Purchaser upon payment to the
Trustee of the amount specified therein, which amount shall be delivered to the
Issuer.
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SECTION 2.5. Form of Senior Bonds. The Senior Bonds, the certificate
of authentication and the form of assignment shall be substantially in the
respective forms thereof set forth in Exhibit A to this Indenture.
All Senior Bonds shall be in fully registered form, and, except as
provided in Section 2.8 hereof, the Holder of a Bond shall be regarded as the
absolute owner thereof for all purposes of this Indenture.
The Senior Bonds shall be negotiable instruments in accordance with
the laws of the State, and shall express the purpose for which they are issued
and any other statements or legends which may be required by law. Each Senior
Bond shall be of a single maturity, unless the Trustee shall approve the
authentication and delivery of a Bond or more than one maturity.
SECTION 2.6. Execution and Authentication of Senior Bonds. Each Senior
Bond shall be signed by the Chief Financial Officer of the Issuer and attested
by the Secretary of the Issuer (provided that any such signatures may be a
facsimile), and the seal of the Issuer shall be impressed or printed thereon,
which seal may be a facsimile. In case any officer whose signature or a
facsimile of whose signature shall appear on any Senior Bond shall cease to be
that officer before the issuance of the Senior Bond, his signature or the
facsimile thereof nevertheless shall be valid and sufficient for all purposes,
the same as if he had remained in office until that time. Any Senior Bond may
be executed on behalf of the Issuer by an officer who, on the date of execution
is the proper officer, although on the date of the Senior Bond that person was
not the proper officer.
No Senior Bond shall be valid or become obligatory for any purpose or
shall be entitled to any security or benefit under this Indenture unless and
until a certificate of authentication, substantially in the form set forth in
Exhibit A to this Indenture, has been signed by the Trustee. The authentication
by the Trustee upon any Senior Bond shall be conclusive evidence that the
Senior Bond so authenticated has been duly authenticated and delivered
hereunder and is entitled to the security and benefit of this Indenture. The
certificate of the Trustee may be executed by any person authorized by the
Trustee, but it shall not be necessary that the same authorized person sign the
certificates of authentication on all of the Senior Bonds.
SECTION 2.7. Source of Payment of Senior Bonds. To the extent provided
in and except as otherwise permitted by this Indenture, (i) the Senior Bonds
shall be senior secured obligations of the Issuer, ranking pari passu with all
other indebtedness of the Issuer, and the Bond Service Charges thereon shall be
payable equally and ratably from all available sources of the Issuer. The
payment of Bond Service Charges on the Senior Bonds shall be additionally
secured by the assignment of Pledged Revenues hereunder and by this Indenture.
SECTION 2.8. Payment and Ownership of Senior Bonds. Bond Service
Charges shall be payable in lawful money of the United States of America
without deduction for the services of the Trustee or any Paying Agent. The
principal of and any premium on any Senior Bond shall be payable when due to a
Holder upon presentation and surrender of such Senior Bond at the principal
corporate trust office of the Trustee or at the office, designated by the
Trustee, of any Paying Agent. Interest on any Senior Bond shall be paid on each
Interest Payment Date by check or draft which the Trustee shall cause to be
mailed on that date to the person in whose name the Senior Bond (or one or more
Predecessor Senior Bonds) is
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<PAGE> 15
registered at the close of business on the Record Date applicable to that
Interest Payment Date on the Register at the address appearing therein, or at
the option of any registered owner of at least $500,000 in aggregate principal
amount of the Senior Bonds, shall be paid by wire transfer in immediately
available funds to the bank account number and address filed with the Trustee
at least fifteen (15) days prior to the applicable Record Date which notice may
provide that it will remain in effect with respect to subsequent Interest
Payment Dates unless and until such notice or instructions are revoked by
written notice filed with the Trustee; provided that such address is in the
continental United States and provided, further, that final payment of
principal and interest shall be made at the corporate trust office of the
Trustee upon presentation and surrender of such Senior Bond.
Except as provided in the first paragraph of Section 2.9 hereof, (i)
the Holder of any Senior Bond shall be deemed and regarded as the absolute
owner thereof for all purposes of this Indenture, (ii) payment of or on account
of the Bond Service Charges on any Senior Bond shall be made only to or upon
the order of that Holder or its duly authorized attorney in the manner
permitted by this Indenture, and (iii) neither the Issuer, the Trustee, the
Registrar nor any Paying Agent shall, to the extent permitted by law, be
affected by notice to the contrary. All of those payments shall be valid and
effective to satisfy and discharge the liability upon that Senior Bond,
including without limitation, the interest thereon, to the extent of the amount
or amounts so paid.
SECTION 2.9. Transfer and Exchange of Senior Bonds. So long as any of
the Senior Bonds remain outstanding, the Issuer will cause books for the
registration and transfer of Senior Bonds, as provided in this Indenture, to be
maintained and kept at the designated office of the Registrar.
Senior Bonds may be exchanged, at the option of their Holder, for
Senior Bonds of the same series and of any authorized denomination or
denominations in an aggregate principal amount equal to the unmatured and
unredeemed principal amount of, and bearing interest at the same rate and
maturing on the same date or dates as, the Senior Bonds being exchanged. The
exchange shall be made upon presentation and surrender of the Senior Bonds
being exchanged at the designated office of the Registrar, together with an
assignment duly executed by the Holder or its duly authorized attorney in any
form which shall be satisfactory to the Registrar.
Any Senior Bond may be transferred upon the Register, upon
presentation and surrender thereof at the designated office of the Registrar,
together with an assignment duly executed by the Holder or its duly authorized
attorney in any form which shall be satisfactory to the Registrar. Upon
transfer of any Senior Bond and on request of the Registrar, the Issuer shall
execute in the name of the transferee, and the Registrar, shall authenticate
and deliver, a new Senior Bond or Senior Bonds of the same series, of any
authorized denomination or denominations in an aggregate principal amount equal
to the unmatured and unredeemed principal amount of, and bearing interest at
the same rate and maturing on the same date or dates as, the Senior Bonds
presented and surrendered for transfer.
In all cases in which Senior Bonds shall be exchanged or transferred
hereunder, the Issuer shall execute, and the Registrar shall authenticate and
deliver, Senior Bonds in accordance with the provisions of this Indenture. The
exchange or transfer shall be made without charge; provided, that the Issuer
and the Registrar, may make a charge for every exchange or transfer of
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<PAGE> 16
Senior Bonds sufficient to reimburse them for any tax or excise required to be
paid with respect to the exchange or transfer. The charge shall be paid before
a new Senior Bond is delivered.
All Senior Bonds issued upon any transfer or exchange of Senior Bonds
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Senior Bonds
surrendered upon transfer or exchange. Neither the Issuer nor the Registrar
shall be required to make any exchange or transfer of a Senior Bond during a
period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of Senior Bonds and ending at the close of
business on the day of such mailing or to transfer or exchange any Senior Bonds
selected for redemption, in whole or in part.
In case any Senior Bond is redeemed in part only, on or after the
redemption date and upon presentation and surrender of the Senior Bond, the
Issuer shall cause execution of, and the Registrar shall authenticate and
deliver, a new Senior Bond or Senior Bonds of the same series in authorized
denominations in an aggregate principal amount equal to the unmatured and
unredeemed portion of, and bearing interest at the same rate and maturing on
the same date or dates as, the Senior Bond redeemed in part.
For purposes of this Section the Trustee shall establish the
designated office of the Registrar.
SECTION 2.10. Mutilated, Lost, Wrongfully Taken or Destroyed Senior
Bonds. If any Senior Bond is mutilated, lost, wrongfully taken or destroyed, in
the absence of written notice to the Issuer or the Registrar that a lost,
wrongfully taken or destroyed Senior Bond has been acquired by a bona fide
purchaser, the Issuer shall execute, and the Registrar shall authenticate and
deliver, a new Senior Bond of like date, maturity and denomination and of the
same series as the Senior Bond mutilated, lost, wrongfully taken or destroyed;
provided, that (i) in the case of any mutilated Senior Bond, the mutilated
Senior Bond first shall be surrendered to the Registrar, and (ii) in the case
of any lost, wrongfully taken or destroyed Senior Bond, there first shall be
furnished to the Issuer, the Trustee and the Registrar evidence of the loss,
wrongful taking or destruction satisfactory to the Authorized Issuer
Representative, the Trustee and the Registrar, together with indemnity
satisfactory to them and to the Issuer.
If any lost, wrongfully taken or destroyed Senior Bond shall have
matured, instead of issuing a new Senior Bond, the Authorized Issuer
Representative may direct the Trustee to pay that Senior Bond without surrender
thereof upon the furnishing of satisfactory evidence and indemnity as in the
case of issuance of a new Senior Bond. The Issuer, the Registrar and the
Trustee may charge the Holder of a mutilated, lost, wrongfully taken or
destroyed Senior Bond their reasonable fees and expenses in connection with
their actions pursuant to this Section.
Every new Senior Bond issued pursuant to this Section by reason of any
Senior Bond being mutilated, lost, wrongfully taken or destroyed (i) shall
constitute, to the extent of the outstanding principal amount of the Senior
Bond lost, mutilated, wrongfully taken or destroyed, an additional contractual
obligation of the Issuer, regardless of whether the mutilated, lost, wrongfully
taken or destroyed Senior Bond shall be enforceable at any time by anyone and
(ii) shall be entitled to all of the benefits of this Indenture equally and
proportionately with any and all other Senior Bonds issued and outstanding
hereunder.
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All Senior Bonds shall be held and owned on the express condition that
the foregoing provisions of this Section are exclusive with respect to the
replacement or payment of mutilated, lost, wrongfully taken or destroyed Senior
Bonds and, to the extent permitted by law, shall preclude any and all other
rights and remedies with respect to the replacement or payment of negotiable
instruments or other investment securities without their surrender,
notwithstanding any law or statute to the contrary now existing or enacted
hereafter.
SECTION 2.11. Cancellation of Senior Bonds. Except as provided in
Section 2.5 hereof, any Senior Bonds surrendered pursuant to this Article for
the purpose of payment or retirement or for exchange, replacement or transfer
shall be cancelled upon presentation and surrender thereof to the Registrar,
the Trustee or any Paying Agent. Any Senior Bond cancelled by the Trustee or a
Paying Agent shall be transmitted promptly to the Registrar by the Trustee or
Paying Agent.
The Issuer may deliver at any time to the Registrar for cancellation
any Senior Bonds previously authenticated and delivered hereunder, which the
Issuer may have acquired in any manner whatsoever. All Senior Bonds so
delivered shall be cancelled promptly by the Registrar. Certification of the
surrender and cancellation shall be made to the Issuer and the Trustee by the
Registrar at least twice each calendar year. Unless otherwise directed by the
Issuer, cancelled Senior Bonds shall be destroyed by the Registrar after their
cancellation. The Registrar shall provide certificates describing the
destruction of cancelled Senior Bonds to the Issuer and the Trustee.
(End of Article II)
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ARTICLE III.
REDEMPTION OF SENIOR BONDS
SECTION 3.1. Terms of Redemption of Senior Bonds. The Senior Bonds are
subject to redemption prior to stated maturity as follows:
(a) Mandatory Sinking Fund Redemption. The Senior Bonds are
subject to mandatory redemption pursuant to mandatory sinking fund
requirements, at a redemption price of 100 percent of the principal
amount redeemed plus interest accrued to the redemption date, on
_____________________, in the following principal amounts in the years
specified:
<TABLE>
<CAPTION>
Principal Amount
Year of to be Redeemed
Redemption on Senior Bonds
------------- ----------------
<S> <C>
2004 $
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
</TABLE>
If retired only by mandatory sinking fund redemption prior to
their stated maturity, there would remain $__________ principal amount
of the Senior Bonds due _______________, 2020, to be paid at maturity.
The Issuer shall have the option to deliver to the Registrar
for cancellation Senior Bonds in any aggregate principal amount and to
receive a credit against the then-current mandatory sinking fund
requirement (and corresponding mandatory redemption obligation) of the
Issuer as set forth in the table above for the Senior Bonds. That
option shall be exercised by the Issuer on or before the 45th day
preceding the applicable mandatory sinking fund redemption date, by
furnishing the Trustee a certificate, executed by the Authorized
Issuer Representative setting forth the extent of the credit to be
applied with respect to the then-current mandatory sinking fund
requirement. If the certificate and the Senior Bonds to be credited
are not timely furnished to the Trustee, the
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<PAGE> 19
mandatory sinking fund requirement (and corresponding mandatory
redemption obligation) shall not be reduced. A credit against the
then-current mandatory sinking fund requirement (and corresponding
mandatory redemption obligation) also shall be received by the Issuer
for any Senior Bonds which prior thereto have been redeemed (other
than through the operation of the mandatory sinking fund requirements)
or purchased for cancellation and cancelled by the Trustee, to the
extent not applied theretofore as a credit against any redemption
obligation. Senior Bonds delivered to the Registrar for cancellation
pursuant to this paragraph shall be credited against the mandatory
sinking fund requirement with respect to the Senior Bonds.
Except as otherwise provided in the preceding paragraph, each
Senior Bond so delivered, or previously redeemed, or purchased and
cancelled, shall be credited by the Trustee at 100 percent of the
principal amount thereof against the then-current mandatory sinking
fund obligation. Except as otherwise provided in the preceding
paragraph any excess of that amount over the then-current mandatory
sinking fund requirement shall be credited against subsequent
mandatory sinking fund redemption obligations in chronological order.
(b) Mandatory Redemption Upon Unenforceability. The Senior
Bonds are subject to mandatory redemption in whole in the event that
the Indenture shall have become void or unenforceable or impossible of
performance in accordance with the intent and purpose of the parties
as expressed therein by reason of any changes in the Constitution of
the State or the Constitution of the United States of America, or by
reason of legal or administrative action (whether state or federal) or
any final decree, judgement or order of any court (whether state or
federal) entered after the contest thereof with the opportunity for
the contest thereof by the Issuer, the Holder or the Trustee in good
faith.
(c) Extraordinary Optional Redemption. The Senior Bonds are
also subject to redemption by the Issuer in whole, but not in part, at
a redemption price of 100% of the principal amount redeemed, plus
interest accrued to the redemption date if the Issuer exercises its
option under this Indenture to prepay the payments due hereunder upon
the occurrence of any of the following events:
(i) The Landfill shall have been damaged or
destroyed (a) to such extent that the Landfill cannot
reasonably be restored within a period of six months to the
condition thereof immediately preceding such damage or
destruction, or (b) to such extent that the Issuer is thereby
prevented from carrying on its normal operations at the
Landfill for a period of six months; or
(ii) Title to, or the temporary use of, all or a
substantial portion of the Landfill shall have been taken
under the exercise of the power of eminent domain by any
governmental authority, or person, firm or corporation acting
under governmental authority, (a) to such extent that the
Landfill cannot reasonably be restored within a period of six
months to a condition of usefulness comparable to that
existing prior to such taking, or (b) if such taking results
in the Issuer being thereby prevented from
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<PAGE> 20
carrying on its normal operations at the Landfill for a
period of six months.
(d) Optional Redemption. The Senior Bonds are callable for
redemption, in whole or in part, at the option of the Issuer on any
date on or after ______________, 200__ at a redemption price as set
forth below (expressed as a percentage of the outstanding principal
amount):
<TABLE>
<CAPTION>
REDEMPTION DATES
(DATES INCLUSIVE) REDEMPTION PRICES
<S> <C>
April 1, 200__ through March 31, 200__ ____%
April 1, 200__ through March 31, 200__ ____%
April 1, 200__ and thereafter 100%
</TABLE>
and thereafter at a redemption price equal to 100% of the principal
amount, together in the case of any such redemption with accrued
interest to the date of redemption.
SECTION 3.2. Issuer's Election to Redeem. Except in the case of
redemption pursuant to any mandatory redemption provisions, Senior Bonds shall
be redeemed only by written notice from the Issuer to the Trustee. That notice
shall specify the redemption date and the principal amount of each maturity of
Senior Bonds to be redeemed, and shall be given at least 45 days prior to the
redemption date or such shorter period as shall be acceptable to the Trustee.
SECTION 3.3. Notice of Redemption. Unless waived in writing by any
Holder of Senior Bonds to be redeemed and except as provided below, official
notice of redemption shall be given by the Registrar on behalf of the Issuer by
mailing a copy of an official redemption notice by registered or certified mail
to the Holder of each Senior Bond to be redeemed, at the address of such Holder
shown on the Senior Bond Register, not less than 30 days nor more than 45 days
prior to the date fixed for redemption.
All official notices of redemption shall be dated and shall state:
(1) the redemption date,
(2) the redemption price,
(3) if less than all outstanding Senior Bonds are to be
redeemed, the identification (and, in the case of partial redemption,
the respective principal amounts) of the Senior Bonds to be redeemed,
(4) that on the redemption date the redemption price will
become due and payable upon each such Senior Bond or portion thereof
called for redemption, and that interest thereon shall cease to accrue
from and after said date, and
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<PAGE> 21
(5) the place where such Senior Bonds are to be surrendered
for payment of the redemption price, which place of payment shall be
in the principal office of the Registrar.
If at the time of mailing of notice of any optional redemption there
shall not have been deposited with the Trustee moneys sufficient to redeem all
the Senior Bonds called for redemption, such notice may state that it is
conditional on the deposit of such moneys with the Trustee not later than the
redemption date, and such notice shall be of no effect unless such moneys are
so deposited.
In addition to the foregoing official notice, further notice shall be
given by the Trustee as set out below, but no defect in said further notice nor
any delay in giving such notice nor any failure to give all or any portion of
such further notice shall in any manner defeat the effectiveness of a call for
redemption if the official notice thereof is given as above prescribed.
1. Each further notice of redemption given hereunder shall
contain the information required above for an official notice of
redemption plus (i) the CUSIP numbers of all Senior Bonds being
redeemed; (ii) the date of issue of the Senior Bonds as originally
issued; (iii) the rate of interest borne by each Senior Bond being
redeemed; (iv) the maturity date of each Senior Bond being redeemed;
and (v) any other descriptive information needed to identify
accurately the Senior Bonds being redeemed.
2. Each further notice of redemption shall be sent at least
30 days before the redemption date by registered or certified mail or
overnight delivery service to all registered securities depositories
then in the business of holding substantial amounts of obligations of
types comprising the Senior Bonds (such depositories now being The
Depository Trust Company of New York, New York, Midwest Securities
Trust Company of Chicago, Illinois, and Philadelphia Depository Trust
Company of Philadelphia, Pennsylvania) and to one or more national
information services that disseminate notices of redemption of
obligations such as the Senior Bonds.
3. Upon the payment of the redemption price of Senior Bonds
being redeemed, each check or other transfer of funds issued for such
purpose shall bear the CUSIP number identifying, by issue and
maturity, the Senior Bonds being redeemed with the proceeds of such
check or other transfer.
Failure to duly give official notice of redemption by mail or any
defect therein shall not affect the validity of the proceedings for the
redemption of any Senior Bond with respect to which no such failure or defect
has occurred. Any notice mailed as provided in this Section shall be
conclusively presumed to have been duly given, whether or not the registered
Holder receives notice.
SECTION 3.4. Payment of Redeemed Senior Bonds. Notice having been
mailed in the manner provided in Section 3.3 hereof, the Senior Bonds and
portions thereof called for redemption shall become due and payable on the
redemption date unless such notice of redemption is conditional, in which case
the Senior Bonds and portions thereof called for redemption will become due and
payable only if funds for the payment thereof are deposited with the Trustee,
and upon presentation and surrender thereof at the place or places specified in
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<PAGE> 22
that notice, shall be paid at the redemption price, including interest accrued
to the redemption date.
If money for the redemption of all of the Senior Bonds and portions
thereof to be redeemed, together with interest accrued thereon to the
redemption date, is held by the Trustee or any Paying Agent on the redemption
date, so as to be available therefor on that date and if notice of redemption
has been deposited in the mail as aforesaid, then from and after the redemption
date those Senior Bonds and portions thereof called for redemption shall cease
to bear interest and no longer shall be considered to be outstanding hereunder.
If those moneys shall not be so available on the redemption date, or that
notice shall not have been deposited in the mail as aforesaid, those Senior
Bonds and portions thereof shall continue to bear interest, until they are
paid, at the same rate as they would have borne had they not been called for
redemption.
All moneys deposited in the Senior Bond Fund and held by the Trustee
or a Paying Agent for the redemption of particular Senior Bonds shall be held
in trust for the account of the Holders thereof and shall be paid to them,
respectively, upon presentation and surrender of those Senior Bonds.
(End of Article III)
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<PAGE> 23
ARTICLE IV.
PROVISIONS AS TO FUNDS AND PAYMENTS
SECTION 4.1. Senior Bond Fund. A special fund is hereby created and
designated "WCA Shiloh Landfill of South Carolina, L.L.C. Senior Bond Fund"
(the "Bond Fund"). There are hereby created within the Bond Fund two separate
accounts designated "Interest Account" and "Principal Account," respectively.
The moneys in said fund shall be held in trust and applied as
hereinafter provided with regard to such fund and, pending such application,
shall be subject to a lien and charge in favor of the Holders of the Senior
Bonds issued and outstanding under this Indenture and for the further security
of such Holders until paid out or transferred as herein provided.
The Issuer covenants that so long as the Senior Bonds are Outstanding,
it will pay directly to the Trustee for deposit, as herein provided, to the
credit of the Senior Bond Fund, all Bond Service Charges owing by the Issuer
under this Indenture in the amounts, respectively, set forth in this Indenture
and in any resolution of the Issuer. The Trustee shall promptly upon the
receipt of such payments deposit such money in the Senior Bond Fund and in each
month in which payments are due and received shall credit such payments so
received to the following funds in the following order:
(a) Beginning __________, 2000 and on the 1st day of each
month thereafter through _______________, 2020, a payment shall be
made into the Interest Account of the Bond Fund in an amount equal to
one-sixth (1/6) of the interest payable on the Senior Bonds on the
next succeeding Interest Payment Date;
(b) On or before the ____ day of each month, into the
foregoing Bond Fund an amount sufficient to make up any deficiency in
any prior payment required to be made into such Bond Fund and to
restore any loss resulting from investment or other causes from such
Bond Fund.
(c) On or before ______________, 2020, an amount equal to the
principal due on the Senior Bonds at maturity shall be deposited into
the Principal Account of the Bond Fund.
(d) All earnings on the Bond Fund shall be deposited to the
Bond Fund to be applied to the payment of Bond Service Charges on the
Senior Bonds.
SECTION 4.2. Investment of Senior Bond Fund. Except as hereinafter
provided, moneys in the Bond Fund shall be invested and reinvested by the
Trustee in Eligible Investments at the written direction of the Authorized
Issuer Representative. Investments of moneys in the Bond Fund shall mature or
be redeemable without penalty at the option of the Trustee at the times and in
the amounts necessary to provide moneys to pay Bond Service Charges as they
become due at stated maturity or by redemption.
Subject to any directions from the Authorized Issuer Representative
with respect thereto, from time to time, the Trustee may sell Bond Fund
investments and reinvest the proceeds
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<PAGE> 24
therefrom in Eligible Investments maturing or redeemable as aforesaid. Any of
those investments may be purchased from or sold to the Trustee, the Registrar
or a Paying Agent, or any bank, trust company or savings and loan association
affiliated with any of the foregoing. The Trustee shall sell or redeem
investments credited to the Bond Fund to produce sufficient moneys applicable
hereunder to and at the times required for the purposes of paying Bond Service
Charges when due as aforesaid, and shall do so without necessity for any order
on behalf of the Issuer and without restriction by reason of any order.
SECTION 4.3. Moneys to be Held in Trust. Except where moneys have been
deposited with or paid to the Trustee pursuant to an instrument restricting
their application to particular Senior Bonds, all moneys required or permitted
to be deposited with or paid to the Trustee or any Paying Agent under any
provision of this Indenture, and any investments thereof, shall be held by the
Trustee or that Paying Agent in trust. Except (i) for moneys deposited with or
paid to the Trustee or any Paying Agent for the redemption of Senior Bonds,
notice of the redemption of which shall have been duly given and (ii) for
moneys held by the Trustee pursuant to Section 4.4 hereof, all moneys described
in the preceding sentence held by the Trustee or any Paying Agent shall be
subject to the lien hereof while so held.
SECTION 4.4. Nonpresentment of Senior Bonds. In the event that any
Senior Bond shall not be presented for payment when the principal thereof
becomes due in whole or in part, either at stated maturity or by redemption, or
a check or draft for interest is uncashed, if moneys sufficient to pay the
principal then due of that Senior Bond or of such check or draft shall have
been made available to the Trustee for the benefit of its Holder, all liability
of the Issuer to that Holder for such payment of the principal then due of the
Senior Bond or of such check or draft thereupon shall cease and be discharged
completely. Thereupon, it shall be the duty of the Trustee to hold those
moneys, without liability for interest thereon, in a separate account in the
Bond Fund for the exclusive benefit of the Holder, who shall be restricted
thereafter exclusively to those moneys for any claim of whatever nature on its
part under this Indenture or on, or with respect to, the principal then due of
that Senior Bond or of such check or draft.
Any of those moneys which shall be so held by the Trustee, and which
remain unclaimed by the Holder of a Senior Bond not presented for payment or
check or draft not cashed for a period of four years after the due date
thereof, shall be paid to the Issuer, free of any trust or lien. Thereafter,
the Holder of that Senior Bond shall look only to the Issuer for payment and
then only to the amounts so received by the Issuer without any interest
thereon, and the Trustee shall not have any responsibility with respect to
those moneys.
SECTION 4.5. Repayment to the Issuer from the Senior Bond Fund. Except
as provided in Section 4.4 hereof, any amounts remaining in the funds and
accounts established under this Indenture (i) after all of the outstanding
Senior Bonds shall be deemed paid and discharged under the provisions of this
Indenture, and (ii) after payment of all fees, charges and expenses of the
Trustee, the Registrar and any Paying Agents or Authenticating Agents and of
all other amounts required to be paid under this Indenture shall be paid to the
Issuer to the extent that those amounts are in excess of those necessary to
effect the payment and discharge of the outstanding Senior Bonds.
(End of Article IV)
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ARTICLE V.
THE TRUSTEE
SECTION 5.1. Acceptance of Trust. The Trustee hereby accepts the
trusts imposed upon it by this Indenture, and agrees to perform said trusts,
but only upon and subject to the following express terms and conditions:
(a) The Trustee, prior to the occurrence of an Event of
Default and after any Event of Default has been cured, undertakes to
perform such duties and only such duties as are specifically set forth
in this Indenture, and no implied duties or obligations may be read
into this Indenture against the Trustee. In case an Event of Default
of which the Trustee has, or is deemed to have, notice has occurred,
(which has not been cured or waived) the Trustee shall exercise such
of the rights and powers vested in it by this Indenture, and use the
same degree of care and skill in exercising such rights and powers as
a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(b) The Trustee may exercise any powers hereunder and perform
any of its duties by or through attorneys, accountants and other
experts, agents, receivers or employees but shall be answerable for
the conduct of the same in accordance with the standard specified
above, and shall be entitled to the advice of counsel concerning its
duties hereunder, and may in all cases pay such reasonable
compensation to all such attorneys, accountants and other experts,
agents and receivers as may reasonably be employed in connection with
the trusts hereof.
(c) The Trustee shall not be responsible for any recital
herein, or in the Senior Bonds, or for the recording or filing of any
instrument required to secure the Senior Bonds, or for the validity of
the execution by the Issuer of this Indenture, or of any instruments
or further assurance, or for the sufficiency of the security for the
Senior Bonds issued hereunder or intended to be secured hereby, but
the Trustee shall be responsible for the filing of any continuation
statements which may from time to time be required to be filed under
the Alabama Uniform Commercial Code in order to continue the
perfection of the lien of this Indenture. The Trustee shall not be
responsible for insuring the Landfill or collecting any insurance
moneys, or for the validity of the execution by the Issuer of this
Indenture or of any supplements hereto or instruments of further
assurance, or for the sufficiency of documents relating to the
security for the Senior Bonds issued hereunder or intended to be
secured hereby, and the Trustee shall not be bound to ascertain or
inquire as to the observance or performance of any covenants,
conditions or agreements on the part of the Issuer except as herein
set forth.
(d) The Trustee shall not be accountable for the use of any
Senior Bonds authenticated or delivered hereunder. The Trustee may
become the owner of Senior Bonds secured hereby with the same rights
which it would have if not the Trustee.
(e) The Trustee shall be protected in acting upon any notice,
request, consent, certificate, order, affidavit, letter, telegram or
other paper or document believed to be
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genuine and correct and to have been signed or sent by the proper
person or persons. Any action taken by the Trustee pursuant to this
Indenture upon the request or authority or consent of any person who
at the time of making such request or giving such authority or consent
is the owner of any Senior Bond, shall be conclusive and binding upon
all future owners of the same Senior Bond and upon Senior Bonds issued
in exchange therefor or in place thereof.
(f) As to the existence or non-existence of any fact or as to
the sufficiency or validity of any instrument, paper or proceeding,
the Trustee shall be entitled to rely upon a certificate signed by an
Authorized Issuer Representative as sufficient evidence of the facts
therein contained and after the occurrence of a default of which the
Trustee is required to take notice, deemed to have notice or has been
given notice as provided in Section 5.1(h) hereof, the Trustee shall
also be at liberty to accept a similar certificate to the effect that
any particular dealing, transaction or action is necessary or
expedient, but may at its discretion secure such further evidence
deemed by it to be necessary or advisable, but shall in no case be
bound to secure the same. The Trustee may accept a certificate of the
Secretary of the Issuer under the seal of the Issuer to the effect
that an authorization in the form therein set forth has been adopted
by the Issuer as conclusive evidence that such authorization has been
duly adopted and is in full force and effect.
(g) The permissive right of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty and the
Trustee shall not be answerable for other than its gross negligence or
willful misconduct.
(h) The Trustee shall not be required to take notice of any
default hereunder except failure by the Issuer to cause to be made any
of the payments to the Trustee required to be made in order to pay
principal, interest or premium, if any, on the Senior Bonds, unless
the Trustee shall be specifically notified in writing of such default
by the Issuer or by an owner of the Senior Bonds, and all notices or
other instruments required by this Indenture to be delivered to the
Trustee, must, in order to be effective, be delivered at the principal
corporate trust office of the Trustee, and in the absence of such
notice so delivered the Trustee may conclusively assume there is not
default except as aforesaid.
(i) At any and all reasonable times the Trustee, and its duly
authorized agents, attorneys, experts, engineers, accountants and
representatives, shall have the right to fully inspect any and all of
the Issuer's property, including all books, papers and records of the
Issuer pertaining to the Landfill and the Senior Bonds, and to take
such memoranda from and with regard thereto as may be desired.
(j) The Trustee shall not be required to give any Senior Bond
or surety in respect of the execution of the said trusts and powers or
otherwise in respect of the premises.
(k) Notwithstanding anything elsewhere in this Indenture with
respect to the authentication of any Senior Bonds, the withdrawal of
any cash, the release of any property, or any action whatsoever within
the purview of this Indenture, the Trustee shall
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have the right, but shall not be required, to demand any showings,
certificates, opinions, appraisals or other information, or corporate
action or evidence thereof, in addition to that which by the terms
hereof is required as a condition of such action, the Trustee deems
desirable for the purpose of establishing the right to the
authentication of any Senior Bonds, the withdrawal of any cash, or the
taking of any other action by the Trustee.
(l) All moneys received by the Trustee shall, until used or
applied or invested as herein provided, be held in trust for the
purposes for which they were received but need not be segregated from
other funds except to the extent required by law.
(m) The Trustee may rely upon advice of counsel chosen by the
Trustee with due care and shall not be responsible for any loss or
damage resulting from any action or non-action taken or omitted to be
taken by the Trustee in good faith in reliance upon advice of such
counsel. The permissive right of the Trustee to do things enumerated
in this Indenture shall not be construed as a duty and the Trustee
shall not be answerable for the exercise of any discretion or power
under this Indenture or for anything whatsoever in connection with the
trusts created hereby, except only for its own gross negligence or
willful misconduct, including that of its directors, officers,
employees or agents.
(n) None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise to
incur financial liability in the performance of any of its duties or
the exercise of any of its rights or powers hereunder, except as
expressly provided herein. The Trustee shall not be required to give
any Senior Bond or surety in respect to the execution of its rights
and obligations hereunder.
SECTION 5.2. Fees, Charges and Expenses of Trustee, Registrar and
Paying Agents. (a) The Trustee, the Registrar and any Paying Agent shall be
entitled to payment or reimbursement by the Issuer for reasonable fees for its
Ordinary Services rendered hereunder and for all advances, counsel fees and
other Ordinary Expenses reasonably and necessarily paid or incurred by them in
connection with the provision of Ordinary Services. For purposes hereof, fees
for Ordinary Services provided for by their respective standard fee schedules
shall be considered reasonable. In the event that it should become necessary
for any of them to perform Extraordinary Services, they shall be entitled to
reasonable extra compensation therefor and to reimbursement for reasonable and
necessary Extraordinary Expenses incurred in connection therewith. Upon an
Event of Default, but only upon an Event of Default, the Trustee shall have a
first lien with right of payment prior to payment on account of principal of,
premium, if any, and interest on any Senior Bond upon the Trust Estate for the
foregoing fees, charges and expenses incurred by it.
(b) Without creating a default or an Event of Default hereunder,
however, the Issuer may contest in good faith the necessity for any
Extraordinary Service and Extraordinary Expense and the reasonableness of any
fee, charge or expense.
(c) The Trustee, the Registrar and any Paying Agents shall not be
entitled to compensation or reimbursement for Extraordinary Services or
Extraordinary Expenses occasioned by their gross negligence or willful
misconduct. Any amounts payable to the Trustee, the Registrar or any Paying
Agent pursuant to this Section 5.2 shall be payable upon
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demand and shall bear interest from the date of demand therefor at the Interest
Rate for Advances.
SECTION 5.3. Intervention by Trustee. The Trustee may intervene on
behalf of the Holders, and shall intervene if requested to do so in writing by
the Holders of at least a majority of the aggregate principal amount of Senior
Bonds then outstanding, in any judicial proceeding to which the Issuer or Waste
Corporation of America, Inc. (the "Company") is a party and which in the
opinion of the Trustee and its counsel has a substantial bearing on the
interest of Holders of the Senior Bonds. The rights and obligations of the
Trustee under this Section are subject to the approval of that intervention by
a court of competent jurisdiction. The Trustee may require that a satisfactory
indemnity Senior Bond be provided to it in accordance with Sections 5.1 and 5.2
hereof before it takes action under this Section.
SECTION 5.4. Successor Trustee. Anything herein to the contrary
notwithstanding,
(a) any corporation or association (i) into which the Trustee may be
converted or merged, (ii) with which the Trustee or any successor to it may be
consolidated, or (iii) to which it may sell or transfer it assets and corporate
trust business as a whole or substantially as a whole, or any corporation or
association resulting from any such conversion, merger, consolidation, sale or
transfer, ipso facto, shall be and become successor Trustee hereunder and shall
be vested with all of the title to the whole property or trust estate
hereunder; and
(b) that corporation or association shall be vested further, as was
its predecessor, with each and every trust, property, remedy, power, right,
duty, obligation, discretion, privilege, claim, demand, cause of action,
immunity, estate, title, interest and lien expressed or intended by this
Indenture to be exercised by, vested in or conveyed to the Trustee, without the
execution or filing of any instrument or document or any further act on the
part of any of the parties hereto.
Any successor Trustee, however, (i) shall be a trust company or a bank having
the powers of a trust company, (ii) shall be duly authorized to exercise trust
powers within the State, and (iii) shall have a reported capital and surplus of
not less than $15,000,000.
SECTION 5.5. Appointment of Co-Trustee. (a) It is the purpose of this
Indenture that there shall be no violation of any law of any jurisdiction
(including without limitation, the laws of the State) denying or restricting
the right of banks or trust companies to transact business as trustees in that
jurisdiction. It is recognized that, (a) if there is litigation under the
Indenture or other instruments or documents relating to the Senior Bonds and
the Landfill, and in particular, in case of the enforcement hereof upon a
default or an Event of Default, or (b) if the Trustee should deem that, by
reason of any present or future law of any jurisdiction, it may not (i)
exercise any of the powers, rights or remedies granted herein to the Trustee,
(ii) hold title to the properties, in trust, as granted herein, or (iii) take
any action which may be desirable or necessary in connection therewith, it may
be necessary that the Trustee appoint an individual or additional institution
as a co-trustee. The following provisions of this Section are adapted to these
ends.
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(b) In the event that the Trustee appoints an individual or additional
institution as a co-trustee, each and every trust, property, remedy, power,
right, duty, obligation, discretion, privilege, claim, demand, cause of action,
immunity, estate, title, interest and lien expressed or intended by this
Indenture to be exercised by, vested in or conveyed to the Trustee shall be
exercisable by, vest in and be conveyed to that co-trustee, but only to the
extent necessary for it to be so vested and conveyed and to enable that
co-trustee to exercise it. Every covenant, agreement and obligation necessary
to the exercise thereof by that co-trustee shall run to and be enforceable by
it.
(c) Should any instrument or document in writing from the Issuer
reasonably be required by the co-trustee so appointed by the Trustee for
vesting and conveying more fully and certainly in and to that co-trustee those
trusts, properties, remedies, powers, rights, duties, obligations, discretions,
privileges, claims, demands, causes of action, immunities, estates, titles,
interests and liens, that instrument or document shall be executed,
acknowledged and delivered, but not prepared, by the Issuer. In case any
co-trustee or a successor to it shall die, become incapable of acting, resign
or be removed, all of the trusts, properties, remedies, powers, rights, duties,
obligations, discretions, privileges, claims, demands, causes of action,
immunities, estates, titles, interests and liens of the co-trustee shall be
exercised by, vest in and be conveyed to the Trustee, to the extent permitted
by law, until the appointment of a successor to the co-trustee.
SECTION 5.6. Resignation by the Trustee. The Trustee may resign at any
time from the trusts created hereby by giving written notice of the resignation
to the Issuer, the Company, the Registrar and any Paying Agents of Senior Bonds
then outstanding and by mailing written notice of the resignation to the
Holders as their names and addresses appear on the Register at the close of
business fifteen days prior to the mailing. The resignation shall take effect
upon the appointment of a successor Trustee.
SECTION 5.7. Removal of the Trustee. (a) The Trustee may be removed at
any time by an instrument or document or concurrent instruments or documents in
writing delivered to the Trustee, with copies thereof mailed to the Issuer, the
Registrar and any Paying Agents, and signed (i) by or on behalf of the Holders
of not less than a majority in aggregate principal amount of the Senior Bonds
then outstanding, or (ii) as long as no Event of Default has occurred under the
Indenture, by the Issuer.
(b) The Trustee also may be removed at any time for any breach of
trust or for acting or proceeding in violation of, or for failing to act or
proceed in accordance with, any provision of this Indenture with respect to the
duties and obligations of the Trustee by any court of competent jurisdiction
upon the application of the Issuer or the Holders of not less than twenty
percent (20%) of the aggregate principal amount of the Senior Bonds then
outstanding under this Indenture.
(c) Any removal of the Trustee shall take effect upon the appointment
of a successor Trustee by the Issuer, the Holders or the court, respectively.
SECTION 5.8. Appointment of Successor Trustee. (a) If (i) the Trustee
shall resign, shall be removed, shall be dissolved, or shall become otherwise
incapable of acting
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hereunder, (ii) the Trustee shall be taken under the control of any public
officer or officers, or (iii) a receiver shall be appointed for the Trustee by
a court, then a successor Trustee shall be appointed by the Issuer, with the
written consent of the Company; provided, that if a successor Trustee is not so
appointed within ten days after (a) a notice of resignation or an instrument or
document of removal is received by the Issuer, as provided in Sections 5.6 and
5.7 hereof, respectively, or (b) the Trustee is dissolved, taken under control,
becomes otherwise incapable of acting or a receiver is appointed, in each case,
as provided above, then, so long as the Issuer shall not have appointed a
successor Trustee, the Holders of a majority in aggregate principal amount of
Senior Bonds then outstanding may designate a successor Trustee by an
instrument or document or concurrent instruments or documents in writing signed
by or on behalf of those Holders. If no appointment of a successor Trustee
shall be made pursuant to the foregoing provisions of this Section, the Holder
of any Senior Bond outstanding hereunder or any retiring Trustee may apply to
any court of competent jurisdiction to appoint a successor Trustee. Such court
may thereupon, after such notice, if any, as such court may deem proper,
appoint a successor Trustee.
(b) Every successor Trustee appointed pursuant to this Section (i)
shall be a trust company or a bank having the powers of a trust company (ii)
shall be in good standing within the State, (iii) shall be duly authorized to
exercise trust powers within the State, (iv) shall have a reported capital and
surplus of not less than $15,000,000 and (v) shall be willing to accept the
trusteeship under the terms and conditions of this Indenture.
(c) Every successor Trustee appointed hereunder shall execute and
acknowledge, and shall deliver to its predecessor, the Issuer, the Registrar,
any Paying Agent and the Company, an instrument or document in writing
accepting the appointment. Thereupon, without any further act, the successor
shall become vested with all of the trusts, properties, remedies, powers,
rights, duties, obligations, discretions, privileges, claims, demands, causes
of action, immunities, estates, titles, interests and liens of its predecessor.
Upon the written request of its successor, the Issuer or the Company, the
predecessor Trustee (i) shall execute and deliver an instrument or document
transferring to its successor all of the trusts, properties, remedies, powers,
rights, duties, obligations, discretions, privileges, claims, demands, causes
of action, immunities, estates, titles, interests and liens of the predecessor
Trustee hereunder, and (ii) shall take any other action necessary to duly
assign, transfer and deliver to its successor all property (including without
limitation, all securities and moneys) held by it as Trustee. Should any
instrument or document in writing from the Issuer be requested by any successor
Trustee for vesting and conveying more fully and certainly in and to that
successor the trusts, properties, remedies, powers, rights, duties,
obligations, discretions, privileges, claims, demands, causes of action,
immunities, estates, titles, interest and liens vested or conveyed or intended
to be vested or conveyed hereby in or to the predecessor Trustee, the Issuer
shall execute, acknowledge and deliver that instrument or document.
(d) In the event of a change in the Trustee, the predecessor Trustee
shall cease to be custodian of any moneys which it may hold pursuant to this
Indenture and shall cease to be Registrar and a Paying Agent for any of the
Senior Bonds, to the extent it served in any of those capacities. The successor
Trustee shall become custodian and, if applicable, Registrar and a Paying
Agent.
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SECTION 5.9. Adoption of Authentication. In case any of the Senior
Bonds shall have been authenticated, but shall not have been delivered, any
successor Trustee or Registrar may adopt the certificate of authentication of
any predecessor Trustee or Registrar and may deliver those Senior Bonds so
authenticated as provided herein. In case any Senior Bonds shall not have been
authenticated, any successor Trustee or Registrar may authenticate those Senior
Bonds either in the name of any predecessor or in its own name. In all cases,
the certificate of authentication shall have the same force and effect as
provided in the Senior Bonds or in this Indenture with respect to the
certificate of authentication of the predecessor Trustee or Registrar.
SECTION 5.10. Registrars.
(a) Succession. Anything herein to the contrary notwithstanding, any
corporation or association (i) into which a Registrar may be converted or
merged, (ii) with which a Registrar or any successor to it may be consolidated,
or (iii) to which it may sell or transfer its corporate trust assets as a whole
or substantially as a whole, or any corporation or association resulting from
any such conversion, merger, consolidation, sale or transfer, ipso facto, shall
be and become successor Registrar to that Registrar hereunder and shall be
vested with each and every power, right, duty, obligation, discretion and
privilege expressed or intended by this Indenture to be exercised by or vested
in the predecessor Registrar, without the execution or filing of any instrument
or document or any further act on the part of any of the parties hereto.
(b) Resignation. A Registrar may resign at any time by giving written
notice of its resignation to the Issuer, the Company, the Trustee, the Original
Purchaser and to each Paying Agent for the Senior Bonds, at least 60 days
before the resignation is to take effect. The resignation shall take effect
immediately, however, upon the appointment of a successor Registrar, if the
successor Registrar is appointed and accepts that appointment before the time
stated in the notice.
(c) Removal. The Registrar may be removed at any time by an instrument
or document or concurrent instruments or documents in writing delivered to the
Registrar, with copies thereof mailed to the Issuer, the Trustee and the
Company, and signed (i) by or on behalf of the Holders of not less than a
majority in aggregate principal amount of the Senior Bonds then outstanding, or
(ii) as long as no Event of Default has occurred under the Indenture, by the
Issuer.
(d) Appointment of Successors. (i) If (A) a Registrar shall resign,
shall be removed, shall be dissolved, or shall become otherwise incapable of
acting hereunder, (B) a Registrar shall be taken under the control of any
public officer or officers, (C) a receiver shall be appointed for a Registrar
by a court, or (D) a Registrar shall have an order for relief entered in any
case commenced by or against it under the federal bankruptcy laws or commence a
proceeding under any federal or state bankruptcy, insolvency, reorganization or
similar law, or have such a proceeding commenced against it and either have an
order of insolvency or reorganization entered against it or have the proceeding
remain undismissed and unstayed for ninety days, then a successor Registrar
shall be appointed by the Issuer and the Trustee; provided, that if a successor
Registrar is not so appointed within ten days after (a) a notice of resignation
or an instrument or document of removal is received by the Issuer, as provided
above, or (b) the
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Registrar is dissolved, taken under control, becomes incapable of acting or a
receiver is appointed, in each case, as provided above, then, if the Issuer
shall not have appointed a successor Registrar, the Trustee or the Holders of a
majority in aggregate principal amount of Senior Bonds then outstanding may
designate a successor Registrar by an instrument or document or concurrent
instruments or documents in writing signed by the Trustee, or in the case of
the Holders, by or on behalf of those Holders.
(ii) Every successor Registrar appointed hereunder shall
execute and acknowledge, and shall deliver to its predecessor, the
Issuer and the Trustee, an instrument or document in writing accepting
the appointment. Thereupon, without any further act, the successor
shall become vested with all of the properties, remedies, powers,
rights, duties, obligations, discretions, privileges, claims, demands,
causes of action, immunities, titles and interest of its predecessor.
Upon the written request of its successor, the Issuer, a predecessor
Registrar (i) shall execute and deliver an instrument or document
transferring to its successor all of the properties, remedies, powers,
rights, duties, obligations, discretions, privileges, claims, demands,
causes of action, immunities, titles and interests of it as
predecessor Registrar hereunder, and (ii) shall take any other action
necessary to duly assign, transfer and deliver to its successor all
property and records (including without limitation, the Register and
any cancelled Senior Bonds) held by it as Registrar. Should any
instrument or document in writing from the Issuer be requested by any
successor Registrar for vesting and conveying more fully and certainly
in and to that successor the properties, remedies, powers, rights,
duties, obligations, discretions, privileges, claims, demands, causes
of action, immunities, titles and interests vested or conveyed or
intended to be vested or conveyed hereby in or to a predecessor
Registrar, the Issuer shall execute, acknowledge and deliver that
instrument or document.
(e) Compensation and Other Applicable Provisions. The Trustee shall
pay to the Registrar from time to time reasonable compensation as authorized in
Section 5.2 hereof for its services, and the Trustee shall be entitled to be
reimbursed for such payments, subject to Section 5.2 hereof. The provisions of
Section 2.8 shall be applicable to the Registrar.
SECTION 5.11. Designation and Succession of Paying Agents. (a) The
Trustee shall be a Paying Agent for the Senior Bonds, and, with the consent of
the Issuer, the Trustee may appoint a Paying Agent or Agents with power to act
on its behalf and subject to its direction in the payment of Bond Service
Charges on the Senior Bonds. It is the responsibility of the Trustee to
establish the duties and responsibilities of any Paying Agent for the purposes
of this Indenture, to the extent not specified herein.
(b) Any corporation or association with or into which any Paying Agent
may be merged or converted or with which it may be consolidated, or any
corporation or association resulting from any merger, consolidation or
conversion to which any Paying Agent shall be a party, or any corporation or
association succeeding to the corporate trust business of any Paying Agent,
shall be the successor of that Paying Agent hereunder, if that successor
corporation or association is otherwise eligible hereunder, without the
execution or filing of any paper or any further act on the part of the parties
hereto or the Paying Agent or that successor corporation or association.
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(c) Any Paying Agent may at any time resign by giving written notice
of resignation to the Trustee, to the Registrar and to the Issuer. The Trustee
may at any time terminate the agency of any Paying Agent by giving written
notice of termination to such Paying Agent, to the Registrar and to the Issuer.
Upon receiving such a notice of resignation or upon such termination, or in
case at any time any Paying Agent shall cease to be eligible under this
Section, the Trustee may appoint a successor Paying Agent. The Trustee shall
give written notice of appointment of a successor Paying Agent to the Issuer
and the Registrar and shall mail, within ten days after that appointment,
notice thereof to all Holders as their names and addresses appear on the
Register on the date of that appointment.
(d) The Trustee shall pay to any Paying Agent from time to time
reasonable compensation as authorized in Section 5.2 hereof for its services,
and the Trustee shall be entitled to be reimbursed for such payments, subject
to Section 5.2 hereof.
(e) The provisions of Section 2.8 shall be applicable to any Paying
Agent.
SECTION 5.12. Dealing in Senior Bonds. The Trustee, a Registrar and a
Paying Agent, their affiliates, and any directors, officers, partners,
employees or agents thereof, in good faith, may become the owners of Senior
Bonds secured hereby with the same rights which it or they would have hereunder
if the Trustee, the Registrar or Paying Agents did not serve in those
capacities.
SECTION 5.13. Representations and Covenants of Trustee. The Trustee
hereby represents that it is an [ALABAMA STATE BANKING CORPORATION] duly
organized and validly existing under the laws of the State of Alabama, in good
standing and duly authorized to exercise corporate trust powers in the State,
and that it has an unimpaired reported capital and surplus of not less than
$15,000,000. The Trustee covenants that it will take such action, if any, as is
necessary to remain in good standing and duly authorized to exercise corporate
trust powers in the State, and that it will maintain an unimpaired reported
capital and surplus of not less than $15,000,000.
[End of Article V]
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ARTICLE VI.
DEFAULT PROVISIONS AND REMEDIES
OF TRUSTEE AND HOLDERS
SECTION 6.1. Defaults; Events of Default. The occurrence of any of the
following events is defined as and declared to be and to constitute an Event of
Default hereunder:
(a) Payment of any interest on any Senior Bond shall not be
made when and as that interest shall become due and payable, and the
failure to make such payment is not cured within two (2) Business Days
after written notice of such failure is received by the Issuer;
(b) Payment of the principal of or any premium on any Senior
Bond shall not be made when and as that principal or premium shall
become due and payable, whether at stated maturity, by redemption
(unless the notice of such redemption shall state that such redemption
is conditional upon the deposit of sufficient funds with the Trustee),
by acceleration or otherwise, and the failure to make such payment is
not cured within two (2) Business Days after written notice of such
failure is received by the Issuer;
(c) Failure by the Issuer to observe or perform any other
covenant, agreement or obligation on its part to be observed or
performed contained in this Indenture or in the Senior Bonds, which
failure shall have continued for a period of 60 days after written
notice, by registered or certified mail, to the Issuer specifying the
failure and requiring that it be remedied, which notice may be given
by the Trustee in its discretion and shall be given by the Trustee at
the written request of the Holders of not less than a majority in
aggregate principal amount of Senior Bonds then outstanding;
(d) The Issuer shall: (i) commence a proceeding under any
federal or state insolvency, reorganization or similar law, or have
such a proceeding commenced against it and either have an order of
insolvency or reorganization entered against it or have the proceeding
remain undismissed and unstayed for 90 days; or (ii) have a receiver,
conservator, liquidator or trustee appointed for it or for the whole
or any substantial part of its property.
The term "default" or "failure" as used in this Article means a
default or failure by the Issuer in the observance or performance of any of the
covenants, agreements or obligations on its part to be observed or performed
contained in this Indenture or in the Senior Bonds.
SECTION 6.2. Notice of Default. If an Event of Default shall occur,
the Trustee shall give written notice of the Event of Default, by registered or
certified mail, to the Issuer, the Registrar, any Paying Agent and the Holders
of the Senior Bonds, within ten days after the Trustee has knowledge of the
Event of Default, provided that such Event of Default shall not have been cured
to the knowledge of the Trustee.
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SECTION 6.3. Acceleration.
(i) Upon the occurrence of an Event of Default as specified
in paragraphs (a) and (b) of Section 6.1 hereof, the Trustee shall,
and upon the occurrence of any other Event of Default defined in said
Section 6.1, the Trustee may and upon the written request of the
Majority Holders shall declare, by a notice in writing delivered to
the Issuer, the principal of all Senior Bonds then outstanding (if not
then due and payable), together with interest accrued thereon, to be
due and payable immediately.
(ii) Any such declaration shall be by notice in writing to
the Issuer and, upon said declaration, principal and interest on all
Senior Bonds shall become and be immediately due and payable. The
Trustee immediately upon such declaration shall give notice thereof in
the same manner as provided in Section 3.3 hereof with respect to the
redemption of the Senior Bonds. Such notice shall specify, if known,
the date on which payment of principal and interest shall be tendered
to the Holders of the Senior Bonds. Interest shall accrue to the
payment date determined by the Trustee pursuant to such declaration or
the actual payment date, if later. Upon any declaration of
acceleration hereunder, the Trustee shall immediately exercise such
rights as it may have to declare all payments hereunder to be
immediately due and payable.
SECTION 6.4. Other Remedies; Rights of Holders. (a) With or without
taking action under Section 6.3 hereof, upon the occurrence and continuance of
an Event of Default, the Trustee may pursue any other available remedy to
enforce the payment of Bond Service Charges or the observance and performance
of any other covenant, agreement or obligation under this Indenture, or any
other instrument providing security, directly or indirectly, for the Senior
Bonds.
(b) If, upon the occurrence and continuance of an Event of Default
under Section 6.1 hereof, the Trustee is requested so to do by the Holders of
at least a majority in aggregate principal amount of Senior Bonds outstanding,
the Trustee (subject to the provisions of Sections 5.1 and 5.2) shall exercise
any rights and powers conferred by this Section and by Section 6.3 hereof.
(c) No remedy conferred upon or reserved to the Trustee (or to the
Holders) by this Indenture is intended to be exclusive of any other remedy.
Each remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or otherwise to the Trustee or to the Holders now or hereafter
existing.
(d) No delay in exercising or omission to exercise any remedy, right
or power accruing upon any default or Event of Default shall impair that
remedy, right or power or shall be construed to be a waiver of any default or
Event of Default or acquiescence therein. Every remedy, right and power may be
exercised from time to time and as often as may be deemed to be expedient.
(e) No waiver of any default or Event of Default hereunder, whether by
the Trustee or by the Holders, shall extend to or shall affect any subsequent
default or Event of Default or shall impair any remedy, right or power
consequent thereon.
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(f) In exercising any remedy, right or power hereunder, the Trustee
shall take any action which would best serve the interests of the Holders in
the judgment of the Trustee, applying the standards described in Sections 5.1
and 5.2 hereof.
SECTION 6.5. Appointment of Receivers. Upon the occurrence of an Event
of Default, and upon the filing of a suit or other commencement of judicial
proceedings to enforce the rights of the Trustee and the Senior Bondholders
under this Indenture, the Trustee shall be entitled, as a matter of right, to
the appointment of a receiver or receivers of the Trust Estate and of the
revenues, earnings, income, products and profits thereof, pending such
proceedings, with such powers as the court making such appointment shall
confer.
SECTION 6.6. Right of Holders to Direct Proceedings. Anything to the
contrary in this Indenture notwithstanding, the Holders of a majority in
aggregate principal amount of Senior Bonds then outstanding shall have the
right at any time to direct, by an instrument or document or instruments or
documents in writing executed and delivered to the Trustee, the method and
place of conducting all proceedings to be taken in connection with the
enforcement of the terms and conditions of this Indenture or any other
proceedings hereunder and any settlement thereof; provided, that (i) any
direction shall not be other than in accordance with the provisions of law and
of this Indenture, (ii) the Trustee shall be indemnified as provided in
Sections 5.1 and 5.2 and, (iii) the Trustee may take any other action which it
deems to be proper and which is not inconsistent with the direction.
SECTION 6.7. Application of Moneys. After payment of any costs,
expenses, liabilities and advances paid, incurred or made by the Trustee in the
collection of moneys pursuant to any right given or action taken under the
provisions of this Article (including without limitation, reasonable attorneys'
fees and expenses, except as limited by law or judicial order or decision
entered in any action taken under this Article VI), all moneys received by the
Trustee, shall be applied as follows, subject to any provision made pursuant to
Sections 3.4 or 4.5 hereof:
(a) unless the principal of all of the Senior Bonds shall
have become, or shall have been declared to be, due and payable, all
of those moneys shall be deposited in the Bond Fund and shall be
applied;
First-To the payment to the Holders entitled thereto of all
installments of interest then due on the Senior Bonds, in the order of
the dates of maturity of the installments of that interest, beginning
with the earliest date of maturity and if the amount available is not
sufficient to pay in full any particular installment, then to the
payment thereof ratably, according to the amounts due on that
installment, to the Holders entitled thereto, without any
discrimination or privilege, except as to any difference in the
respective rates of interest specified in the Senior Bonds; and
Second-To the payment to the Holders entitled thereto of the
unpaid principal of any of the Senior Bonds which shall have become
due (other than Senior Bonds previously called for redemption for the
payment of which moneys are held pursuant to the provisions of this
Indenture), whether at stated maturity, by redemption or otherwise, in
the order of their due dates, beginning with the earliest due date,
with interest on those
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Senior Bonds from the respective dates upon which they become due at
the rates specified in those Senior Bonds, and if the amount available
is not sufficient to pay in full all Senior Bonds due on any
particular date, together with that interest, then to the payment
thereof ratably, according to the amounts of principal due on that
date, to the Holders entitled thereto, without any discrimination or
privilege, except as to any difference in the respective rates of
interest specified in the Senior Bonds.
(b) If the principal of all of the Senior Bonds shall have become due
or shall have been declared to be due and payable pursuant to this Article, all
of those moneys shall be deposited into the Senior Bond Fund and shall be
applied to the payment of the principal and interest then due and unpaid upon
the Senior Bonds, without preference or priority of principal over interest, of
interest over principal, of any installment of interest over any other
installment of interest, or of any Senior Bond over any other Senior Bond,
ratably, according to the amounts due respectively for principal and interest,
to the Holders entitled thereto, without any discrimination or privilege,
except as to any difference in the respective rates of interest specified in
the Senior Bonds.
(c) Whenever moneys are to be applied pursuant to the provisions of
this Section, those moneys shall be applied at such times, and from time to
time, as the Trustee shall determine, having due regard to the amount of moneys
available for application and the likelihood of additional moneys becoming
available for application in the future. Whenever the Trustee shall direct the
application of those moneys, it shall fix the date upon which the application
is to be made, and upon that date, interest shall cease to accrue on the
amounts of principal, if any, to be paid on that date, provided the moneys are
available therefor. The Trustee shall give notice of the deposit with it of any
moneys and of the fixing of that date, and shall not be required to make
payment of principal of and any premium on a Senior Bond to the Holder thereof,
until the Senior Bond shall be presented to the Trustee for appropriate
endorsement or for cancellation if it is paid fully.
SECTION 6.8. Remedies Vested in Trustee. All rights of action
(including without limitation, the right to file proof of claims) under this
Indenture or under any of the Senior Bonds may be enforced by the Trustee
without the possession of any of the Senior Bonds or the production thereof in
any trial or other proceeding relating thereto. Any suit or proceeding
instituted by the Trustee shall be brought in its name as Trustee without the
necessity of joining any Holders as plaintiffs or defendants. Any recovery of
judgment shall be for the benefit of the Holders of the outstanding Senior
Bonds, subject to the provisions of this Indenture.
SECTION 6.9. Rights and Remedies of Holders. A Holder shall not have
any right to institute any suit, action or proceeding for the enforcement of
this Indenture, for the execution of any trust hereof, or for the exercise of
any other remedy hereunder, unless:
(a) there has occurred and is continuing an Event of Default
of which the Trustee has been properly notified or of which it is
deemed to have notice under Section 5.1 hereof,
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(b) the Holders of at least a majority in aggregate principal
amount of Senior Bonds then outstanding shall have made written
request to the Trustee and shall have afforded the Trustee reasonable
opportunity to proceed to exercise the remedies, rights and powers
granted herein or to institute the suit, action or proceeding in its
own name, and shall have offered indemnity to the Trustee as provided
in Sections 5.1 and 5.2 hereof, and
(c) the Trustee thereafter shall have failed or refused to
exercise the remedies, rights and powers granted herein or to
institute the suit, action or proceeding in its own name.
At the option of the Trustee, that notification (or notice), request,
opportunity and offer of indemnity are conditions precedent in every case to
the institution of any suit, action or proceeding described above. Anything in
the foregoing to the contrary notwithstanding, no Holder of any Senior Bond
shall have any right to institute any suit, action or proceeding at law or in
equity for the enforcement of this Indenture or for the execution of any trust
hereof or for the appointment of a receiver or any other remedy hereunder.
No one or more Holders of the Senior Bonds shall have any right to
affect, disturb or prejudice in any manner whatsoever the security or benefit
of this Indenture by its or their action, or to enforce, except in the manner
provided herein, any remedy, right or power hereunder. Any suit, action or
proceedings shall be instituted, had and maintained in the manner provided
herein for the benefit of the Holders of all Senior Bonds then outstanding.
Nothing in this Indenture shall affect or impair, however, the right of any
Holder to enforce the payment of the Bond Service Charges on any Senior Bond
owned by that Holder at and after the maturity thereof, at the place, from the
sources and in the manner expressed in that Senior Bond.
SECTION 6.10. Termination of Proceedings. In case the Trustee shall
have proceeded to enforce any remedy, right or power under this Indenture in
any suit, action or proceedings, and the suit, action or proceedings shall have
been discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee, the Issuer, the Trustee and the Holders shall be
restored to their former positions and rights hereunder, respectively, and all
rights, remedies and powers of the Trustee shall continue as if no suit, action
or proceedings had been taken.
SECTION 6.11. Waivers of Events of Default. Except as hereinafter
provided, the Trustee, by notice to the Company and the Issuer, may waive any
Event of Default hereunder and its consequences and may rescind and annul any
declaration of maturity of principal of the Senior Bonds.
There shall not be so waived, however, any Event of Default described
in paragraph (a) or (b) of Section 6.1 hereof except with the written consent
of the Holders of all Senior Bonds then outstanding nor shall any declaration
of acceleration in connection therewith be rescinded or annulled except with
the written consent of the Holders of at least 66 2/3% of the principal amount
of Senior Bonds outstanding. In the case of the waiver or rescission and
annulment, or in case any suit, action or proceedings taken by the Trustee on
account of any Event of Default shall have been discontinued, abandoned or
determined adversely to it, the Issuer, the Trustee
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and the Holders shall be restored to their former positions and rights
hereunder, respectively. No waiver or rescission shall extend to any subsequent
or other Event of Default or impair any right consequent thereon.
(End of Article VI)
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ARTICLE VII.
SUPPLEMENTAL INDENTURES
SECTION 7.1. Supplemental Indentures Generally. The Issuer and the
Trustee may enter into indentures supplemental to this Indenture, as provided
in this Article and pursuant to the other provisions therefor in this
Indenture, including particularly, Section 2.1 hereof.
SECTION 7.2. Supplemental Indentures Not Requiring Consent of Holders.
Without the consent of, or notice to, any of the Holders, the Issuer and the
Trustee may enter into indentures supplemental to this Indenture which shall
not, in the opinion of the Issuer and the Trustee, be inconsistent with the
terms and provisions hereof for any one or more of the following purposes:
(a) To cure any ambiguity, inconsistency or formal defect or
omission in this Indenture;
(b) To grant to or confer upon the Trustee for the benefit of
the Holders any additional rights, remedies, powers or authority that
lawfully may be granted to or conferred upon the Holders or the
Trustee;
(c) To assign additional revenues under this Indenture;
(d) To accept additional security and instruments and
documents of further assurance;
(e) To add to the covenants, agreements and obligations of
the Issuer under this Indenture, other covenants, agreements and
obligations to be observed for the protection of the Holders, or to
surrender or limit any right, power or authority reserved to or
conferred upon the Issuer in this Indenture;
(f) To evidence any succession to the Issuer and the
assumption by its successor of the covenants, agreements and
obligations of the Issuer under this Indenture and the Senior Bonds;
(g) To permit the use of a book entry system to identify the
owner of an interest in an obligation issued by the Issuer under this
Indenture, whether that obligation was formerly, or could be,
evidenced by a tangible security;
(h) To permit the Trustee to comply with any obligations
imposed upon it by law;
(i) To specify further the duties and responsibilities of,
and to define further the relationship among, the Trustee, the
Registrar and any Paying Agents;
(j) To achieve compliance of this Indenture with any
applicable federal securities or tax law; and
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(k) To permit any other amendment which, in the judgment of
the Trustee, is not to the prejudice of the Trustee or the Holders.
The provisions of Subsections 7.2(h) and (j) shall not be deemed to
constitute a waiver by the Trustee, the Registrar, the Issuer or any Holder of
any right which it may have in the absence of those provisions to contest the
application of any change in law to this Indenture or the Senior Bonds.
SECTION 7.3. Indentures Requiring Consent of Holders. (a) Exclusive of
Supplemental Indentures to which reference is made in Section 7.2 hereof and
subject to the terms, provisions and limitations contained in this Section, and
not otherwise, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Senior Bonds at the time outstanding,
evidenced as provided in this Indenture, the Issuer and the Trustee may execute
and deliver Supplemental Indentures adding any provisions to, changing in any
manner or eliminating any of the provisions of this Indenture or any
Supplemental Indenture or restricting in any manner the rights of the Holders.
Nothing in this Section 7.3 or Section 7.2 hereof shall permit, however, or be
construed as permitting:
(i) without the consent of the Holder of each Senior Bond so
affected, (i) an extension of the maturity of the principal of or the
interest on any Senior Bond, or (ii) a reduction in the principal
amount of any Senior Bond or the rate of interest or premium thereon;
or
(ii) without the consent of the Holders of all Senior Bonds
so affected, (i) the creation of a privilege or priority of any Senior
Bond or Senior Bonds over any other Senior Bond or Senior Bonds, or
(ii) a reduction in the aggregate principal amount of the Senior Bonds
required for consent to a Supplemental Indenture.
(b) If the Issuer shall request that the Trustee execute and deliver
any Supplemental Indenture for any of the purposes of this Section, upon being
satisfactorily indemnified with respect to its expenses in connection
therewith, the Trustee shall cause notice of the proposed execution and
delivery of the Supplemental Indenture to be mailed by first class mail,
postage prepaid, to all Holders of Senior Bonds then outstanding at their
addresses as they appear on the Register at the close of business on the
fifteenth day preceding that mailing.
(c) The Trustee shall not be subject to any liability to any Holder by
reason of the Trustee's failure to mail, or the failure of any Holder to
receive, the notice required by this Section. Any failure of that nature shall
not affect the validity of the Supplemental Indenture when there has been
consent thereto as provided in this Section. The notice shall set forth briefly
the nature of the proposed Supplemental Indenture and shall state that copies
thereof are on file at the principal corporate trust office of the Trustee for
inspection by all Holders.
(d) If the Trustee shall receive, within a period prescribed by the
Issuer, of not less than 60 days, but not exceeding one year, following the
mailing of the notice, an instrument or document or instruments or documents,
in form to which the Trustee does not reasonably object, purporting to be
executed by the Holders of not less than a majority in aggregate principal
amount of the Senior Bonds then outstanding (which instrument or document or
instruments or
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documents shall refer to the proposed Supplemental Indenture in the form
described in the notice and specifically shall consent to the Supplemental
Indenture in substantially that form), the Trustee shall, but shall not
otherwise, execute and deliver the Supplemental Indenture in substantially the
form to which reference is made in the notice as being on file with the
Trustee, without liability or responsibility to any Holder, regardless of
whether that Holder shall have consented thereto.
(e) Any consent shall be binding upon the Holder of the Senior Bond
giving the consent and, anything herein to the contrary notwithstanding, upon
any subsequent Holder of that Senior Bond and of any Senior Bond issued in
exchange therefor (regardless of whether the subsequent Holder has notice of
the consent to the Supplemental Indenture). A consent may be revoked in
writing, however, by the Holder who gave the consent or by a subsequent Holder
of the Senior Bond by a revocation of such consent received by the Trustee
prior to the execution and delivery by the Trustee of the Supplemental
Indenture. At any time after the Holders of the required percentage of Senior
Bonds shall have filed their consents to the Supplemental Indenture, the
Trustee shall make and file with the Issuer a written statement that the
Holders of the required percentage of Senior Bonds have filed those consents.
That written statement shall be conclusive evidence that the consents have been
so filed.
(f) If the Holders of the required percentage in aggregate principal
amount of Senior Bonds outstanding shall have consented to the Supplemental
Indenture, as provided in this Section, no Holder shall have any right (a) to
object to (i) the execution or delivery of the Supplemental Indenture, (ii) any
of the terms and provisions contained therein, or (iii) the operation thereof,
(b) to question the propriety of the execution and delivery thereof, or (c) to
enjoin or restrain the Trustee or the Issuer from that execution or delivery or
from taking any action pursuant to the provisions thereof.
SECTION 7.4. Authorization to Trustee; Effect of Supplement. The
Trustee is authorized to join with the Issuer in the execution and delivery of
any Supplemental Indenture in accordance with this Article and to make the
further agreements and stipulations which may be contained therein. Thereafter,
(a) that Supplemental Indenture shall form a part of this Indenture;
(b) all terms and conditions contained in that Supplemental Indenture
as to any provision authorized to be contained therein shall be deemed to be a
part of the terms and conditions of this Indenture for any and all purposes;
(c) this Indenture shall be deemed to be modified and amended in
accordance with the Supplemental Indenture; and
(d) the respective rights, duties and obligations under this Indenture
of the Issuer, the Trustee, the Registrar, the Paying Agents, and all Holders
of Senior Bonds then outstanding shall be determined, exercised and enforced
hereunder in a manner which is subject in all respects to those modifications
and amendments made by the Supplemental Indenture.
Express reference to any executed and delivered Supplemental Indenture may be
made in the text of any Senior Bonds issued thereafter, if that reference is
deemed necessary or desirable by the
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Trustee or the Issuer. A copy of any Supplemental Indenture for which provision
is made in this Article, except a Supplemental Indenture described in clause
(g) of Section 7.2 hereof, shall be mailed by the Trustee to the Registrar and
each Paying Agent. The Trustee shall not be required to execute any
Supplemental Indenture containing provisions adverse to the Trustee.
SECTION 7.5. Opinion of Counsel. The Trustee shall be entitled to
receive, and shall be fully protected in relying upon, the opinion of any
counsel approved by it as conclusive evidence that (i) any proposed
Supplemental Indenture complies with the provisions of this Indenture, and (ii)
it is proper for the Trustee to join in the execution of that Supplemental
Indenture under the provisions of this Article. That counsel may be counsel for
the Issuer.
SECTION 7.6. Modification by Unanimous Consent. Notwithstanding
anything contained elsewhere in this Indenture, the rights and obligations of
the Issuer and of the Holders, and the terms and provisions of the Senior Bonds
and this Indenture or any Supplemental Indenture, may be modified or altered in
any respect with the consent of (i) the Issuer, (ii) the Holders of all of the
Senior Bonds then outstanding.
(End of Article VII)
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ARTICLE VIII.
DEFEASANCE
SECTION 8.1. Release of Indenture. If (i) the Issuer shall pay all of
the outstanding Senior Bonds, or shall cause them to be paid and discharged, or
if there otherwise shall be paid to the Holders of the outstanding Senior
Bonds, all Bond Service Charges due or to become due thereon, and (ii)
provision also shall be made for the payment of all other sums payable
hereunder, then this Indenture shall cease, determine and become null and void
(except for those provisions surviving by reason of Section 8.3 hereof in the
event the Senior Bonds are deemed paid and discharged pursuant to Section 8.2
hereof), and the covenants, agreements and obligations of the Issuer hereunder
shall be released, discharged and satisfied.
Thereupon, and subject to the provisions of Section 8.3
hereof if applicable,
(i) the Trustee shall release this Indenture (except for
those provisions surviving by reason of Section 8.3 hereof in the
event the Senior Bonds are deemed paid and discharged pursuant to
Section 8.2 hereof), and shall execute and deliver to the Issuer any
instruments or documents in writing as shall be requisite to evidence
that release and discharge or as reasonably may be requested by the
Issuer, and
(ii) the Trustee and any other Paying Agents shall assign and
deliver to the Issuer any property subject at the time to the lien of
this Indenture which then may be in their possession, except amounts
in the Senior Bond Fund required (a) to be paid to the Issuer under
Section 4.5 hereof, or (b) to be held by the Trustee and the Paying
Agents under Section 8.2 hereof or otherwise for the payment of Bond
Service Charges.
SECTION 8.2. Payment and Discharge of Senior Bonds. (a) All or any
part of the Senior Bonds shall be deemed to have been paid and discharged
within the meaning of this Indenture, including without limitation, Section 8.1
hereof, if:
(i) the Trustee as paying agent and any Paying Agents shall
have received, in trust for and irrevocably committed thereto,
sufficient moneys, or
(ii) the Trustee shall have received, in trust for and
irrevocably committed thereto, noncallable Government Obligations
which are certified by an independent public accounting firm of
national reputation to be of such maturities or redemption dates and
interest payment dates, and to bear such interest, as will be
sufficient together with any moneys to which reference is made in
subparagraph (a) above, without further investment or reinvestment of
either the principal amount thereof or the interest earnings therefrom
(which earnings are to be held likewise in trust and so committed,
except as provided herein),
for the payment of all Bond Service Charges on those Senior Bonds, at their
maturity or redemption date, as the case may be, or if a default in payment
shall have occurred on any maturity or redemption date, then for the payment of
all Bond Service Charges thereon to the date of the tender of payment;
provided, if any of those Senior Bonds are to be redeemed prior to
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the maturity thereof, notice of that redemption shall have been duly given or
irrevocable provision satisfactory to the Trustee shall have been duly made for
the giving of that notice.
(b) Any moneys held by the Trustee in accordance with the provisions
of this Section may be invested by the Trustee only in noncallable Government
Obligations having maturity dates, or having redemption dates which, at the
option of the holder of those obligations, shall be not later than the date or
dates at which moneys will be required for the purposes described above. To the
extent that any income or interest earned by, or increment to, the investments
held under this Section is determined from time to time by the Trustee to be in
excess of the amount required to be held by the Trustee for the purposes of
this Section, that income, interest or increment shall be transferred at the
time of that determination in the manner provided in Section 4.5 hereof for
transfers of amounts remaining in the Bond Fund.
(c) If any Senior Bonds shall be deemed paid and discharged pursuant
to this Section 8.2, then within 15 days after such Senior Bonds are so deemed
paid and discharged the Trustee shall cause a written notice by first class
mail, postage prepaid, to be given to each Holder thereof as shown on the
Register on the date on which such Senior Bonds are deemed paid and discharged.
Such notice shall state the numbers of the Senior Bonds deemed paid and
discharged or state that all Senior Bonds of a particular series are deemed
paid and discharged, set forth a description of the obligations held pursuant
to subparagraph (b) of the first paragraph of this Section 8.2 and specify any
date or dates on which any of the Senior Bonds are to be called for redemption
pursuant to notice of redemption given or irrevocable provisions made for such
notice pursuant to the first paragraph of this Section 8.2.
SECTION 8.3. Survival of Certain Provisions. Notwithstanding the
foregoing, any provisions of this Indenture which relate to the maturity of
Senior Bonds, interest payments and dates thereof, optional and mandatory
redemption provisions, exchange, transfer and registration of Senior Bonds,
replacement of mutilated, destroyed, lost or stolen Senior Bonds, the
safekeeping and cancellation of Senior Bonds, non-presentment of Senior Bonds,
the holding of moneys in trust, and repayments to the Issuer from the Senior
Bond Fund and the duties of the Trustee and the Registrar in connection with
all of the foregoing, shall remain in effect and be binding upon the Trustee,
the Registrar, Paying Agents and the Holders notwithstanding the release and
discharge of this Indenture. The provisions of this Article shall survive the
release, discharge and satisfaction of this Indenture.
(End of Article VIII)
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ARTICLE IX.
COVENANTS AND AGREEMENTS
OF THE ISSUER
SECTION 9.1. Covenants and Agreements of the Issuer. In addition to
any other covenants and agreements of the Issuer contained in this Indenture,
the Issuer further covenants and agrees with the Holders and the Trustee as
follows:
(a) Payment of Bond Service Charges. The Issuer will pay all
Bond Service Charges, or cause them to be paid, solely from the
sources provided herein, on the dates, at the places and in the manner
provided in this Indenture.
(b) Revenues and Assignment of Revenues. The Issuer will not
assign the Pledged Revenues or create or authorize to be created any
debt, lien or charge thereon, other than the assignment thereof under
this Indenture and as otherwise permitted by this Indenture.
(c) Recordings and Filings. At its own expense, the Issuer
will cause this Indenture and any related instrument or documents
relating to the assignment made by it under this Indenture to secure
the Senior Bonds, to be recorded and filed in the manner and in the
places which may be required by law in order to preserve and protect
fully the security of the Holders and the rights of the Trustee
hereunder.
(d) Inspection of Landfill Books. All books, instruments and
documents in the Issuer's possession relating to the Landfill and the
Pledged Revenues shall be open to inspection and copying at all times
during the Issuer's regular business hours by any accountants or other
agents of the Trustee which the Trustee may designate from time to
time.
(e) Registrar. At reasonable times and under reasonable
regulations established by the Registrar, the Register may be
inspected and copied by the Trustee, by Holders of twenty-five percent
or more in principal amount of the Senior Bonds then outstanding, or a
designated representative thereof.
SECTION 9.2. Observance and Performance of Covenants, Authority and
Actions. The Issuer will observe and perform faithfully at all times all
covenants, agreements, authority, actions, undertakings, stipulations and
provisions to be observed or performed on its part under the Indenture and the
Senior Bonds which are executed, authenticated and delivered under this
Indenture, and under all proceedings of the Issuer pertaining thereto.
The Issuer represents and warrants that
(a) It is duly authorized under its articles of
incorporation, bylaws and by resolution of its board of directors to
issue the Senior Bonds, to execute and deliver this Indenture and to
provide the security for payment of the Bond Service Charges in the
manner and to the extent set forth in this Indenture.
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(b) All actions required on its part to be performed for the
issuance, sale and delivery of the Senior Bonds and for the execution
and delivery of this Indenture have been or will be taken duly and
effectively.
(c) The Senior Bonds will be valid and enforceable special
obligations of the Issuer according to their terms.
SECTION 9.3. Enforcement of Issuer's Obligations. Each obligation of
the Issuer required to be undertaken pursuant to this Indenture and the Senior
Bonds is binding upon the Issuer, and upon each officer or employee thereof as
may have from time to time the authority under law to take any action on behalf
of the Issuer which may be necessary to perform all or any part of that
obligation, as a duty of the Issuer.
SECTION 9.4. Priority of Pledge. The pledge herein made of the Pledged
Revenues and any other revenues and receipts from the Landfill shall be prior
and superior to any pledge thereof hereafter made for the benefit of any other
securities hereafter issued or any contract hereafter made by the Issuer. In
the event that the Issuer should hereafter issue any other securities payable,
in whole or in part, out of the revenues or receipts to be derived from the
Landfill or for which any part of said revenues or receipts may be pledged or
any part of the Landfill may be mortgaged, or in the event the Issuer should
hereafter make any contract payable, in whole or in part, out of said revenues
and receipts or for which any part of said revenues and receipts may be pledged
or any part of the Landfill may be mortgaged, the Issuer will, in the
proceedings under which any such securities or contract are hereafter
authorized, recognize the priority of the pledge of said revenues and receipts
made herein for the benefit of the Senior Bonds.
SECTION 9.5. Maintenance, Repairs, Changes, Alterations, Taxes and
Other Charges. The Issuer will continuously maintain the Landfill in good
operating condition (reasonable wear and tear excepted), making from time to
time all necessary and proper renewals thereof and repairs and replacements
thereto (including, without limitation, exterior and structural repairs,
renewals and replacements), or the Issuer will cause the Landfill and said
improvements to be so maintained and such repairs and replacements to be so
made.
The Issuer will pay, or will cause to be paid, (a) all taxes and
governmental charges of any kind whatsoever that may be lawfully assessed or
levied against or with respect to the Landfill or any part thereof including,
without limiting the generality of the foregoing, any taxes levied upon or with
respect to the Landfill (or the receipts, income or profits of the Issuer
therefrom) which, if not paid, would become a lien on the Landfill prior to or
on a parity with the lien of the Indenture or a charge on the revenues and
receipts therefrom prior to or on a parity with the charge thereon and the
pledge and assignment thereof created and made in the Indenture, (b) all
utility and other charges incurred in the operation, maintenance, use,
occupancy and upkeep of the Landfill, and (c) all assessments and charges
lawfully made by any governmental body for public improvements that may be
secured by a lien on the Landfill; provided, however, that with respect to
special assessments or other governmental charges that may lawfully be paid in
installments over a period of years, the Issuer shall be obligated to pay, or
cause to be paid, only such installments as come due while any part of the
principal of and the interest (and premium, if any) on the Senior Bonds remains
outstanding and unpaid. The Issuer
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<PAGE> 48
may, however, defer or cause to be deferred payment of any such taxes, charges
or assessments pending the bona fide contest thereof unless the Trustee shall
be of the opinion that by such action the lien of the Indenture as to any part
of the Landfill shall be endangered or the Landfill or any part thereof shall
be subject to loss or forfeiture, in which event any such payment then due
shall not be deferred.
SECTION 9.6. Sale of Landfill Prohibited Except Under Certain
Conditions. The Issuer will not, except as permitted or contemplated hereby,
hereafter sell or otherwise dispose of the whole or any part of the Landfill
until the principal of and the interest (and premium, if any) on all the Senior
Bonds have been paid in full, or unless and until provision for such payment
has been made.
SECTION 9.7. Freedom of Landfill from Prior Liens. The Issuer will
keep the Landfill free from all liens and encumbrances (other than Permitted
Encumbrances), but it may defer payment pending the bona fide contest of any
claim unless the Trustee shall be of the opinion that by such action the lien
of the Indenture as to any part of the Landfill shall be materially endangered
or the Landfill or any part thereof shall be subject to loss or forfeiture, in
which event any such payment then due shall not be deferred. Nothing herein
contained shall be construed to prevent the Issuer from hereafter purchasing
(with funds other than the proceeds of the Senior Bonds), for use in connection
with or as a part of the Landfill, additional property on conditional or lease
sale contract or subject to vendor's lien or purchase money mortgage, and as to
all property so purchased, the Indenture shall be subject and subordinate to
such conditional or lease sale contract, vendor's lien or purchase money
mortgage.
SECTION 9.8. Payment of Trustee Charges. The Issuer will discharge,
pay or satisfactorily provide to the Trustee, or cause to be discharged, paid
or provided, all liabilities, expenses and advances reasonably incurred,
disbursed or made by the Trustee in the execution of the trusts hereby created
(including the reasonable compensation and expenses and disbursements of its
counsel and of all other persons not regularly in its employ), and it will from
time to time pay to the Trustee, or cause to be paid, reasonable compensation
for its services hereunder, including extra compensation for unusual or
extraordinary services. All such liabilities, expenses, advances and
compensation shall be secured hereby, shall be entitled to priority of payment
over the principal of and the interest (and premium, if any) on the Senior
Bonds and shall bear interest until paid at (a) an annual rate equal to the
Interest Rate for Advances, or (b) the highest annual rate then permitted under
the laws of the State of Alabama (whichever of the foregoing (a) or (b) is
less), from and after the respective dates thirty (30) days following the
respective dates on which the Trustee makes demand for the payment thereof.
SECTION 9.9. To Record and to Grant Further Assurances. The Issuer
will file the Indenture (or an appropriate notice thereof), and all
Supplemental Indentures hereafter executed (or appropriate notices thereof), in
such public office or offices in which said documents are required by law to be
filed in order to constitute constructive notice thereof and to preserve and
protect fully the rights and security afforded thereby to the Trustee and to
the Holders of the Senior Bonds. In addition, the Issuer
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<PAGE> 49
(a) will, upon reasonable request, execute and deliver such
further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectually the purpose of the
Indenture, and in particular (without in any way limiting the
generality of the foregoing) to make subject to the charge or lien
hereof (1) the revenues from any property hereafter acquired as a part
of the Landfill, or (2) other Pledged Revenues, to transfer to any
successor Trustee or Trustees the assets, powers, instruments and
funds held in trust hereunder and to confirm the lien of the Indenture
with respect to any Senior Bonds issued hereunder, and
(b) will take all actions that at the time and from time to
time may be necessary (or, in the opinion of the Trustee, may be
necessary) to perfect, preserve, protect and secure the interests of
the Issuer and the Trustee, or either, in and to the Pledged Revenues,
including, without limitation, the filing of all financing and
continuation statements that may at the time be required under the
Alabama Uniform Commercial Code.
No failure to request such further instruments or further acts shall be deemed
a waiver of any right to the execution and delivery of such instruments or the
doing of such acts or be deemed to affect the interpretation of any provisions
of the Indenture.
SECTION 9.10. Insurance Required. The Issuer will, not later than the
date of delivery of this Indenture, provide and thereafter continuously
maintain in effect or cause to be provided and thereafter continuously
maintained in effect, insurance with respect to the Landfill against such
risks, with such limits and deductibles and to such extent, as are customarily
insured against by businesses owning and operating construction and demolition
disposal facilities similar in size and character to the Landfill, paying (or
causing to be paid) as the same become due all premiums with respect thereto,
including, but not necessarily limited to:
(a) Insurance against loss or damage to the Landfill and any other
improvements at the time situated at the Landfill by fire, lightning or other
casualty, including malicious mischief or vandalism, with uniform standard
extended coverage endorsement limited only as may be provided in the standard
form of extended coverage endorsement at the time in use in the applicable
state, to the extent of such amount as is necessary to provide for full payment
of the costs of repairing or replacing the property damaged or destroyed or, if
insurance to such extent is not available, to the extent of the full insurable
value (as determined by a recognized insurer) of the Landfill and any other
such improvements, with a deductible not to exceed $__________;
(b) If there are any boilers or pressure vessels located at the
Landfill, boiler or pressure vessel insurance in an amount customarily carried
in the case of industrial operations similar to those at the Landfill;
(c) Comprehensive general liability insurance against liability for
personal or bodily injury to or death of persons and for damage to or loss of
property occurring on or about the site of the Landfill or in any way related
to the operations being conducted at the Landfill or in or about the Landfill,
in the minimum amounts of $1,000,000 for total death and bodily injury claims
and for property damage resulting from any one accident or occurrence; and
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<PAGE> 50
(d) Workmen's compensation coverage, disability benefits insurance and
any other type of insurance required by the laws of the applicable state.
All policies evidencing the insurance required by the terms of the
preceding paragraph shall be taken out and maintained in generally-recognized
responsible insurance companies, qualified under the laws of South Carolina to
assume the respective risks undertaken and shall contain an agreement on the
part of the insurer issuing such policy that the same shall not be cancelled by
such insurer unless thirty (30) days' prior written notice of such cancellation
shall have been given to the Trustee. All such insurance policies, other than
those evidencing the insurance required by subparagraph (c) of the preceding
paragraph and such other policies or portions thereof as may evidence insurance
against liability for injury to persons or property of others, shall name as
insured the Trustee and shall contain standard mortgage clauses providing for
all losses in excess of $100,000 to be paid to the Trustee; provided, however,
that all losses (including those in excess of $100,000) may be adjusted by the
Issuer, subject, in the case of any single loss in excess of $100,000, to the
approval of the Trustee. Policies, binders or certificates evidencing the
insurance required to be carried by this Section 9.10 shall be deposited with
the Trustee. Prior to the expiration or cancellation of any such policy, the
Issuer will furnish to the Trustee evidence reasonably satisfactory to the
Trustee that such policy has been renewed or replaced by another policy or that
there is no necessity therefor under this Indenture. Anything herein to the
contrary notwithstanding, any insurance required by the provisions hereof may
be evidenced by a blanket policy covering risks in addition to those hereby
required to be covered, but if and only if appropriate allocation certificates
and loss payable endorsements are furnished to the Trustee. All insurance
required herein shall name the Trustee as additional insured parties. All
policies issued hereunder shall contain a provision that notice in writing be
given to the Trustee by the insurer at least thirty (30) days prior to any
modification or cancellation of the policy.
SECTION 9.11. Maintenance of Corporate Existence; Consolidation or
Merger.
(a) Until payment in full of the Senior Bonds, the Issuer shall
maintain its existence, will not transfer all or substantially all of its
assets and will not consolidate with or merge into another corporation, without
the express written consent of the Bondholders of a majority in principal
amount of the Senior Bonds; provided, however, the Issuer may, without the
prior written consent of the Majority Holders, consolidate with or merge into
any direct or indirect wholly-owned subsidiary of the Issuer or the Company,
and may consolidate with or merge into another corporation or transfer all or
substantially all of its assets and if desired, thereafter dissolve and
terminate its existence, but only on the condition that (a) the resulting
corporation or transferee as applicable, shall expressly assume and agree in
writing to perform all of the Issuer's obligations under this Indenture, and is
duly qualified to do business in the State, (b) the resulting corporation or
transferee, as applicable, has a consolidated net worth, determined in
accordance with generally accepted accounting principles, equal to or greater
than the consolidated worth of the Issuer immediately prior to such
consolidation or merger or transfer and (c) the resulting corporation or
transferee, as applicable, shall not have any unresolved legal or
administrative proceedings pending before any court or other tribunal, the
results of which could materially and adversely affect such corporation's or
transferee's net worth, its ability to assume the Issuer's obligation under
this Indenture, or its ability to operate the Landfill.
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<PAGE> 51
(b) In the event a transfer of assets under this Section is made to a
corporation, such corporation may thereafter, transfer all or substantially all
of its assets to another corporation, or consolidate with or merge into another
corporation, or permit one or more other corporations to consolidate with or
merge into it, but only on the condition that the surviving or resulting
corporation or transferee satisfies the requirements of the preceding paragraph
of this Section.
(c) If a transfer of assets, consolidation or merger is made as
provided in this Section, the provisions of this Section shall continue in full
force and effect and no further such transfer of assets, consolidation or
merger shall be made except in compliance with the provisions of this Section.
(d) At least 30 days prior to any transfer of assets, consolidation or
merger under this Section, the transferee or surviving or resulting entity
shall provide written notice of such proposed event to the Issuer and the
Trustee and, prior to such transfer, consolidation or merger the transferee or
surviving or resulting entity shall provide evidence satisfactory to the Issuer
and the Trustee that all requirements of this Section have been satisfied.
SECTION 9.12. Disposition of Condemnation Award. If title to all or
any part of the Landfill shall be taken through the exercise of the power of
eminent domain, the entire condemnation award referable thereto shall be paid
to and held by the Trustee and shall thereafter be applied by the Trustee in
the manner and for the purposes specified in this Indenture.
(End of Article IX)
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<PAGE> 52
ARTICLE X.
MEETINGS OF HOLDERS
SECTION 10.1. Purposes of Meetings. A meeting of Holders, or of the
Holders of any series of Senior Bonds, may be called at any time and from time
to time pursuant to the provisions of this Article X to the extent relevant to
the Holders of all of the Senior Bonds of Senior Bonds of that series, as the
case may be, to take any action (i) authorized to be taken by or on behalf of
the Holders of any specified aggregate principal amount of the Senior Bonds, or
of that series, (ii) under any provision of this Indenture or (iii) authorized
or permitted by law.
SECTION 10.2. Call of Meetings. (a) The Trustee may call at any time a
meeting of Holders pursuant to Section 10.1 to be held at any reasonable time
and place the Trustee shall determine. Notice of such meeting, setting forth
the time, place and generally the subject thereof, shall be mailed by first
class mail, postage prepaid, not fewer than 15 nor more than 90 days prior to
the date of the meeting to the Holders at their addresses as they appear on the
Register on the fifteenth day preceding such mailing, which fifteenth day,
preceding the mailing shall be the record date for the meeting.
(b) If at any time the Issuer or the Holders of at least twenty-five
percent in aggregate principal amount of the Senior Bonds, or if applicable,
the affected series of Senior Bonds, then outstanding, shall have requested the
Trustee to call a meeting of Holders, by written request setting forth the
purpose of the meeting, and the Trustee shall not have mailed the notice of the
meeting within 20 days after receipt of the request, then the Issuer or the
Holders of Senior Bonds in the amount above specified may determine the time
and the place of the meeting and may call the meeting to take any action
authorized in Section 10.1 by mailing notice thereof as provided above.
(c) Any meetings of Holders, or the Holders of any series of Senior
Bonds affected by a particular matter, shall be valid without notice, if the
Holders of all Senior Bonds, or if applicable, the affected series of Senior
Bonds, then outstanding are present in person or by proxy, or if notice is
waived before or after the meeting by the Holders of all Senior Bonds, or if
applicable, the affected series of Senior Bonds, outstanding who were not so
present at the meeting, and if the Issuer and the Trustee are either present by
duly authorized representatives or have waived notice, before or after the
meeting.
SECTION 10.3. Voting. To be entitled to vote at any meeting of
Holders, a Person shall (a) be a Holder of one or more outstanding Senior
Bonds, or if applicable, of the affected series of Senior Bonds, as of the
record date for the meeting as determined above, or (b) be a person appointed
by an instrument or document in writing as proxy by a Person who is a Holder as
of the record date for the meeting, of one or more outstanding Senior Bonds or,
if applicable, of the affected series of Senior Bonds. Each Holder or proxy
shall be entitled to one vote for each $5,000 principal amount of Senior Bonds
held or represented by it. The vote upon any resolution submitted to any
meeting of Holders shall be by written ballots on which shall be subscribed the
signatures of the Holders of Senior Bonds or of their representatives by proxy
and the identifying number or numbers of the Senior Bonds held or represented
by them.
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SECTION 10.4. Meetings. (a) Notwithstanding any other provision of
this Indenture, the Trustee may make any reasonable regulations which it may
deem to be advisable for meetings of Holders, with regard to
(i) proof of the holding of Senior Bonds and of the
appointment of proxies,
(ii) the appointment and duties of inspectors of votes,
(iii) recordation of the proceedings of those meetings,
(iv) the execution, submission and examination of proxies and
other evidence of the right to vote, and
(v) any other matters concerning the conduct, adjournment or
reconvening of meetings which it may think fit.
(b) The Trustee shall appoint a temporary chair of the meeting by an
instrument or document in writing, unless the meeting shall have been called by
the Issuer or by the Holders, as provided in Section 10.2, in which case the
Issuer or the Holders calling the meeting, as the case may be, shall appoint a
temporary chair in like manner. A permanent chair and a permanent secretary of
the meeting shall be elected by vote of the Holders of a majority in principal
amount of the Senior Bonds represented at the meeting and entitled to vote.
(c) The only Persons who shall be entitled to be present or to speak
at any meeting of Holders shall be the Persons entitled to vote at the meeting
and their counsel, any representatives of the Trustee or Registrar and their
counsel and any representatives of the Issuer and its counsel.
SECTION 10.5. Miscellaneous. Nothing contained in this Article X shall
be deemed or construed to authorize or permit any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the Trustee or to
the Holders under any of the provisions of this Indenture or of the Senior
Bonds by reason of any call of a meeting of Holders or any right conferred
expressly or impliedly hereunder to make a call.
(End of Article X)
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<PAGE> 54
ARTICLE XI.
MISCELLANEOUS
SECTION 11.1. Limitation of Rights. With the exception of rights
conferred expressly in this Indenture, nothing expressed or mentioned in or to
be implied from this Indenture or the Senior Bonds is intended or shall be
construed to give to any Person other than the parties hereto, the Registrar,
the Paying Agents, and the Holders of the Senior Bonds any legal or equitable
right, remedy, power or claim under or with respect to this Indenture or any
covenants, agreements, conditions and provisions contained herein. This
Indenture and all of those covenants, agreements, conditions and provisions are
intended to be, and are, for the sole and exclusive benefit of the parties
hereto, the Registrar, the Paying Agents and the Holders of the Senior Bonds,
as provided herein.
SECTION 11.2. Severability. In case any section or provision of this
Indenture, or any covenant, agreement, stipulation, obligation, act or action,
or part thereof, made, assumed, entered into or taken under this Indenture, or
any application thereof, is held to be illegal or invalid for any reason, or is
inoperable at any time, that illegality, invalidity or inoperability shall not
affect the remainder thereof or any other section or provision of this
Indenture or any other covenant, agreement, stipulation, obligation, act or
action, or part thereof, made, assumed, entered into or taken under this
Indenture, all of which shall be construed and enforced at the time as if the
illegal, invalid or inoperable portion were not contained therein.
Any illegality, invalidity or inoperability shall not affect any
legal, valid and operable section, provision, covenant, agreement, stipulation,
obligation, act, action, part or application, all of which shall be deemed to
be effective, operative, made, assumed, entered into or taken in the manner and
to the full extent permitted by law from time to time.
SECTION 11.3. Notices. Except as provided in Section 6.2 hereof, it
shall be sufficient service or giving of any notice, request, complaint, demand
or other instrument or document, if it is duly mailed by first class, certified
or registered mail, or delivered by hand. Notices to the Issuer and the Trustee
shall be addressed as follows:
(a) WCA Shiloh Landfill, L.L.C., One Riverway, Houston, Texas
77056, Attn: Vice-President;
(b) If to the Trustee, at Regions Bank, Montgomery, Alabama
_________________, ___, ___________,
Duplicate copies of each notice, request, complaint, demand or other instrument
or document given hereunder by the Issuer or the Trustee to one or more of the
others also shall be given to all of the others. The foregoing parties may
designate, by notice given hereunder, any further or different addresses to
which any subsequent notice, request, complaint, demand or other instrument or
document shall be sent. The Trustee shall designate, by notice to the Issuer
the addresses to which notices or copies thereof shall be sent to the Registrar
and the Paying Agents.
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In connection with any notice mailed pursuant to the provisions of
this Indenture, a certificate of the Trustee, the Issuer, the Registrar or the
Holders of the Senior Bonds, whichever or whoever mailed that notice, that the
notice was so mailed shall be conclusive evidence of the proper mailing of the
notice.
SECTION 11.4. Suspension of Mail. If because of the suspension of
delivery of first class mail or, for any other reason, the Trustee or any other
Person shall be unable to mail by the required class of mail any notice
required to be mailed by the provisions of this Indenture, the Trustee or any
other Person shall give such notice in such other manner as in the judgment of
the Trustee or such Person shall most effectively approximate mailing thereof,
and the giving of that notice in that manner for all purposes of this Indenture
shall be deemed to be in compliance with the requirement for the mailing
thereof. Except as otherwise provided herein, the mailing of any notice shall
be deemed complete upon deposit of that notice in the mail and the giving of
any notice by any other means of delivery shall be deemed complete upon receipt
of the notice by the delivery service.
SECTION 11.5. Payments Due on Saturdays, Sundays and Holidays. If any
Interest Payment Date, date of maturity of the principal of any Senior Bonds,
or date fixed for the redemption of any Senior Bonds is not a Business Day,
then payment of interest, principal and any redemption premium need not be made
by the Trustee or any Paying Agent on that date, but that payment may be made
on the next succeeding Business Day with the same force and effect as if that
payment were made on the Interest Payment Date, date of maturity or date fixed
for redemption, and no interest shall accrue for the period after that date.
SECTION 11.6. Instruments of Holders. Any writing, including without
limitation, any consent, request, direction, approval, objection or other
instrument or document, required under this Indenture to be executed by any
Holder may be in any number of concurrent writings of similar tenor and may be
executed by that Holder in person or by an agent or attorney appointed in
writing. Proof of (i) the execution of any writing, including without
limitation, any consent, request, direction, approval, objection or other
instrument or document, (ii) the execution of any writing appointing any agent
or attorney, and (iii) the ownership of Senior Bonds, shall be sufficient for
any of the purposes of this Indenture, if made in the following manner, and if
so made, shall be conclusive in favor of the Trustee with regard to any action
taken thereunder, namely:
(a) The fact and date of the execution by any person of any writing
may be proved by the certificate of any officer in any jurisdiction who has
power by law to take acknowledgments within the jurisdiction, that the person
signing the writing acknowledged that execution before that officer, or by
affidavit of any witness to that execution;
(b) The fact of ownership of Senior Bonds shall be proved by the
Register maintained by the Registrar.
Nothing contained herein shall be construed to limit the Trustee to
the foregoing proof, and the Trustee may accept any other evidence of the
matters stated therein which it deems to be sufficient. Any writing, including
without limitation, any consent, request, direction, approval, objection or
other instrument or document, of the Holder of any Senior Bond shall bind every
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<PAGE> 56
further Holder of the same Senior Bond, with respect to anything done or
suffered to be done by the Issuer, the Trustee, the Registrar or any Paying
Agent pursuant to that writing.
SECTION 11.7. Priority of this Indenture. This Indenture shall be
superior to any liens which may be placed upon the Revenues or any other funds
or accounts created pursuant to this Indenture.
SECTION 11.8. Extent of Covenants; No Personal Liability. All
covenants, stipulations, obligations and agreements of the Issuer contained in
this Indenture are and shall be deemed to be covenants, stipulations,
obligations and agreements of the Issuer to the full extent authorized by the
Act and permitted by the Constitution of the State. No covenant, stipulation,
obligation or agreement of the Issuer contained in this Indenture shall be
deemed to be a covenant, stipulation, obligation or agreement of any present or
future member, officer, agent or employee of the Issuer in other than that
person's official capacity. Neither the members of the Board of Directors of
the Issuer nor any official executing the Senior Bonds, this Indenture or any
amendment or supplement hereto or thereto shall be liable personally on the
Senior Bonds or be subject to any personal liability or accountability by
reason of the issuance or execution hereunder or thereof.
SECTION 11.9. Binding Effect. This Indenture shall inure to the
benefit of and shall be binding upon the Issuer and the Trustee and their
respective successors and assigns, subject, however, to the limitations
contained herein.
SECTION 11.10. Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be regarded as an original and all
of which shall constitute but one and the same instrument.
SECTION 11.11. Governing Law. This Indenture and the Senior Bonds
shall be deemed to be contracts made under the laws of the State and for all
purposes shall be governed by and construed in accordance with the laws of the
State, except to the extent that Alabama conflict of law rules would require
the substantive rules of law of any other jurisdiction to apply.
(End of Article XI)
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<PAGE> 57
IN WITNESS WHEREOF, the Issuer and the Trustee, as Trustee and
Registrar, have executed this Trust Indenture all as of the date first above
written.
WCA SHILOH LANDFILL, L.L.C.
By:
-------------------------------------
Its:
---------------------------------
ATTEST:
By:
-------------------------------------
Its:
---------------------------------
REGIONS BANK, MONTGOMERY, ALABAMA
-----------------------------------------
as Trustee, Paying Agent and Registrar
By:
-------------------------------------
Agent
53
<PAGE> 58
STATE OF _______________ )
)
COUNTY OF )
I, ________________________________, a Notary Public in and for said
county in said state, hereby certify that ____________________, whose name as
_______________________ of WCA SHILOH LANDFILL, L.L.C., a Delaware limited
liability company, is signed to the foregoing instrument and who is known to
me, acknowledged before me on this day that, being informed of the contents of
the within instrument, he, as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.
GIVEN under my hand and official seal of office, this ____ day of
_________________, 2000.
-------------------------------------
Notary Public
My Commission Expires:
-------------------------------------
(NOTARIAL SEAL)
STATE OF _______________ )
)
COUNTY OF )
I, ________________________________, a Notary Public in and for said
county in said state, hereby certify that ___________________, whose name as
Agent of REGIONS BANK, a state banking association, is signed to the foregoing
instrument and who is known to me, acknowledged before me on this day that,
being informed of the contents of the within instrument, he, as such officer
and with full authority, executed the same voluntarily for and as the act of
said corporation.
GIVEN under my hand and official seal of office, this _____ day of
______________________, 2000.
-------------------------------------
Notary Public
My Commission Expires:
-------------------------------------
(NOTARIAL SEAL)
54
<PAGE> 59
EXHIBIT A
Senior Bond FORM
WCA SHILOH LANDFILL, L.L.C.
SENIOR SECURED BONDS
NO. R-____-
<TABLE>
<CAPTION>
Interest
Maturity Date: Dated as of: Rate CUSIP Number
-------------- ------------ ---- ------------
<S> <C> <C> <C>
_____________, 2020 _____________, 2000
</TABLE>
WCA Shiloh Landfill, L.L.C. (the "Issuer"), a Delaware limited
liability company, for value received, promises to pay to
____________________________ or registered assigns, but solely from the sources
and in the manner referred to herein, the principal amount of
__________________________________ DOLLARS
on the aforesaid Maturity Date, unless this Senior Bond is called for earlier
redemption, and to pay from those sources interest thereon at the rate
described above, payable on July 1 and January 1 of each year, commencing July
1, 2000 (an "Interest Payment Date"), until the principal amount is paid or
duly provided for. Interest shall be calculated on the basis of a 360-day year
and twelve 30-day months. This Senior Bond will bear interest from the most
recent date to which interest has been paid or duly provided for or, if no
interest has been paid or duly provided for, from its date.
The principal of this Senior Bond is payable upon presentation and
surrender hereof at the principal corporate trust office of the trustee,
presently Regions Bank, Montgomery, Alabama, (the "Trustee"). Interest is
payable on each Interest Payment Date by check or draft mailed to the person in
whose name this Senior Bond (or one or more predecessor Senior Bonds) is
registered (the "Holder") at the close of business on the fifteenth day of the
month immediately preceding that Interest Payment Date (the "Record Date") on
the registration books for this issue maintained by the Trustee, as Registrar,
at the address appearing therein, or, in certain circumstances, by wire
transfer as described in the Indenture. The principal of and interest on this
Senior Bond are payable in lawful money of the United States of America,
without deduction for the services of the paying agent.
This Senior Bond shall not be entitled to any security or benefit
under the Indenture or be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been signed.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS SENIOR BOND SET
FORTH ON THE REVERSE SIDE. THOSE PROVISIONS SHALL HAVE THE SAME EFFECT FOR ALL
PURPOSES AS IF SET FORTH HERE.
A-1
<PAGE> 60
It is certified and recited that there have been performed and have
happened in regular and due form, as required by law, all acts and conditions
necessary to be done or performed by the Issuer or to have happened (i)
precedent to and in the issuing of the Senior Bonds in order to make them
legal, valid and binding senior secured obligations of the Issuer, and (ii)
precedent to and in connection with the execution and delivery of the
Indenture; that payment in full for the Senior Bonds has been received.
IN WITNESS OF THE ABOVE, the Issuer has caused this Senior Bond to be
executed in the name of the Issuer by the manual or facsimile signatures of its
Chief Financial Officer and its Secretary, and its official seal to be
impressed hereon or a facsimile thereof to be placed hereon, as of the date
shown above.
WCA SHILOH LANDFILL, L.L.C.
[SEAL]
By: (facsimile)
----------------------------
Attest: (facsimile)
------------------------
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This Senior Bond is one of the Senior Bonds described in the
within-mentioned Indenture.
REGIONS BANK, Montgomery, Alabama
Trustee
By:
----------------------------
Authorized Signer
A-2
<PAGE> 61
[ON REVERSE SIDE OF SENIOR BOND]
GENERAL PROVISIONS
This Senior Bond is one of a duly authorized issue of Senior Secured
Bonds, (the "Senior Bonds"), issuable under the Trust Indenture dated as of
___________________, 2000 (the "Indenture") between the Issuer and the Trustee,
aggregating in principal amount $5,000,000. The Senior Bonds are being issued
for the purpose of financing the general operating expenses and working capital
needs of the Shiloh Landfill, a construction and demolition-type landfill
located near Travelers Rest, South Carolina (the "Landfill"), as defined in the
Indenture. The Senior Bonds are senior secured obligations of the Issuer,
issued or to be issued under and are to be secured and entitled equally and
ratably to the protection given by the Indenture.
Reference is made to the Indenture for a more complete description of
the Landfill, the provisions, among others, with respect to the nature and
extent of the security for the Senior Bonds, the rights, duties and obligations
of the Issuer, the Trustee and the Holders of the Senior Bonds, and the terms
and conditions upon which the Senior Bonds are issued and secured. Each Holder
assents, by its acceptance hereof, to all of the provisions of the Indenture.
Pursuant to the Indenture, the Issuer is required to make monthly
payments to the Trustee in the amounts and at the times necessary to pay the
principal, premium, if any, and interest (the "Bond Service Charges") on the
Senior Bonds.
Copies of the Indenture are on file in the principal corporate trust
office of the Trustee.
This Senior Bond is a senior secured obligation of the Issuer, ranking
pari passu with all other indebtedness of the Issuer, and the Bond Service
Charges on the Senior Bonds are payable from all legally available sources of
the Issuer, and are additionally secured by the Pledged Revenues, as defined
and as provided in the Indenture (being, generally, all rents, receipts, issues
and profits derived by the Issuer from the operation or ownership of the
Landfill to which the Issuer may be entitled, including but not limited to all
commercial receipts derived from commercial operation of the Landfill, such as
disposal fees, tipping fees and all other moneys to which the Issuer may be
entitled.)
The Senior Bonds are issuable only as fully registered Bonds in the
denominations of $5,000 and any integral multiple thereof and are exchangeable
for Senior Bonds of other authorized denominations in equal aggregate principal
amounts at the office of the Registrar specified on the face hereof, but only
in the manner and subject to the limitations provided in the Indenture. This
Senior Bond is transferable at the office of the Registrar, by the Holder in
person or by his attorney, duly authorized in writing, upon presentation and
surrender hereof to the Registrar. The Registrar is not required to transfer or
exchange (i) any Senior Bond during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Senior Bonds and ending at the close of business on the day of such mailing, or
(ii) any Senior Bonds so selected for redemption.
A-3
<PAGE> 62
REDEMPTION
The Senior Bonds are subject to redemption prior to stated maturity
pursuant to first class mailed notice thereof by the Trustee at least 30 days
prior to the redemption date, as follows:
(a) Mandatory Redemption Upon Unenforceability. The Senior Bonds are
subject to mandatory redemption in whole in the event that the Indenture shall
have become void or unenforceable or impossible of performance in accordance
with the intent and purpose of the parties as expressed therein by reason of
any changes in the Constitution of the State or the Constitution of the United
States of America, or by reason of legal or administrative action (whether
state or federal) or any final decree, judgement or order of any court (whether
state or federal) entered after the contest thereof with the opportunity for
the contest thereof by the Issuer, the Holder or the Trustee in good faith.
(b) Extraordinary Optional Redemption. The Senior Bonds are also
subject to redemption by the Issuer in whole, but not in part, at a redemption
price of 100% of the principal amount redeemed, plus interest accrued to the
redemption date if the Issuer exercises its option under this Indenture to
prepay the payments due hereunder upon the occurrence of any of the following
events:
(i) The Landfill shall have been damaged or destroyed (a) to
such extent that the Landfill cannot reasonably be restored within a
period of six months to the condition thereof immediately preceding
such damage or destruction, or (b) to such extent that the Issuer is
thereby prevented from carrying on its normal operations at the
Landfill for a period of six months; or
(ii) Title to, or the temporary use of, all or a substantial
portion of the Landfill shall have been taken under the exercise of
the power of eminent domain by any governmental authority, or person,
firm or corporation acting under governmental authority, (a) to such
extent that the Landfill cannot reasonably be restored within a period
of six months to a condition of usefulness comparable to that existing
prior to such taking, or (b) if such taking results in the Issuer
being thereby prevented from carrying on its normal operations at the
Landfill for a period of six months.
(c) Optional Redemption. The Senior Bonds are callable for redemption,
in whole or in part, at the option of the Issuer on any date on or after April
1, 2002 at a redemption price as set forth below (expressed as a percentage of
the outstanding principal amount):
<TABLE>
<CAPTION>
REDEMPTION DATES
(DATES INCLUSIVE) REDEMPTION PRICES
<S> <C>
April 1, 2002 through March 31, 2003 105%
April 1, 2003 through March 31, 2004 104%
April 1, 2004 through March 31, 2005 103%
April 1, 2005 through March 31, 2006 102%
April 1, 2006 through March 31, 2007 101%
April 1, 2007 and thereafter 100%
</TABLE>
A-4
<PAGE> 63
and thereafter at a redemption price equal to 100% of the principal
amount, together in the case of any such redemption with accrued
interest to the date of redemption.
Except in the case of redemption pursuant to any mandatory redemption
provisions, Senior Bonds shall be redeemed only by written notice from the
Issuer to the Trustee. That notice shall specify the redemption date and the
principal amount of each maturity of Senior Bonds to be redeemed, and shall be
given at least 45 days prior to the redemption date or such shorter period as
shall be acceptable to the Trustee.
Unless waived in writing by any Holder of Senior Bonds to be redeemed
and except as provided below, official notice of redemption shall be given by
the Registrar on behalf of the Issuer by mailing a copy of an official
redemption notice by registered or certified mail to the Holder of each Senior
Bond to be redeemed, at the address of such Holder shown on the Senior Bond
Register, not less than 30 days nor more than 45 days prior to the date fixed
for redemption.
Failure to duly give official notice of redemption by mail or any
defect therein shall not affect the validity of the proceedings for the
redemption of any Senior Bond with respect to which no such failure or defect
has occurred. Any notice mailed as provided in this Section shall be
conclusively presumed to have been duly given, whether or not the registered
Holder receives notice.
Notice having been mailed in the manner provided in the Indenture, the
Senior Bonds and portions thereof called for redemption shall become due and
payable on the redemption date unless such notice of redemption is conditional,
in which case the Senior Bonds and portions thereof called for redemption will
become due and payable only if funds for the payment thereof are deposited with
the Trustee, and upon presentation and surrender thereof at the place or places
specified in that notice, shall be paid at the redemption price, including
interest accrued to the redemption date.
If money for the redemption of all of the Senior Bonds and portions
thereof to be redeemed, together with interest accrued thereon to the
redemption date, is held by the Trustee or any Paying Agent on the redemption
date, so as to be available therefor on that date and if notice of redemption
has been deposited in the mail as aforesaid, then from and after the redemption
date those Senior Bonds and portions thereof called for redemption shall cease
to bear interest and no longer shall be considered to be outstanding hereunder.
If those moneys shall not be so available on the redemption date, or that
notice shall not have been deposited in the mail as aforesaid, those Senior
Bonds and portions thereof shall continue to bear interest, until they are
paid, at the same rate as they would have borne had they not been called for
redemption.
All moneys deposited in the Bond Fund and held by the Trustee or a
Paying Agent for the redemption of particular Senior Bonds shall be held in
trust for the account of the Holders thereof and shall be paid to them,
respectively, upon presentation and surrender of those Senior Bonds.
A-5
<PAGE> 64
LEGAL OPINION
The following is a true copy of the opinion rendered by M. Fredrick
Simpler, Jr., P.C. in connection with the issuance of, and dated as of and
premised on facts and law in effect on the date of the original delivery of,
the Senior Bonds. A signed copy is on file with the Issuer.
[to be completed]
A-6
<PAGE> 65
ASSIGNMENT
For value received, the undersigned sells, assigns and transfers unto
____________________________________________________ the within Senior Secured
Bond and irrevocably constitutes and appoints _________________________
attorney to transfer that Senior Bond on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: _____________
- -----------------------------
Signature
Signature Guaranteed:
- --------------------
NOTICE: The assignor's signature to this assignment must correspond with the
name as it appears upon the face of the within Senior Bond in every particular,
without alteration or any change whatever.
A-7
<PAGE> 1
EXHIBIT 8
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is entered into between
JIM BROWN, an Individual, DAVID EASTMAN, an Individual, EASTMAN BROWN/HOLDING
CO., L.L.C. (each, individually, a "Seller" and collectively, the "Sellers") and
WASTE CORPORATION OF AMERICA, INC. or its assigns ("Purchaser").
W I T N E S S E T H:
In consideration of the mutual covenants set forth herein and in
consideration of $100.00 paid by Purchaser to Sellers, the receipt and
sufficiency of which is hereby acknowledged by Sellers, the parties hereto
hereby agree as follows:
Section 1. Sale and Purchase, Purchase Price
(a) Sellers hereby agree to sell, convey, and assign to Purchaser and
Purchaser hereby agrees to purchase and accept from Sellers, for the Purchase
Price (hereinafter defined) and on and subject to the terms and conditions
herein set forth, the following:
(1) Good and indefeasible title in fee simple to the tracts or
parcels of land situated in Greenville County, South Carolina, described in
Exhibit "A" hereto together with all rights and interests appurtenant thereto,
including all of Sellers' right, title and interest in and to adjacent streets,
alleys, rights-of-way and any adjacent strips or gores of real estate (the
"Land"); and all rights, titles, and interests appurtenant to the Land;
(2) Any leases, franchises, licenses, or other agreements,
providing for the use or occupancy of, or otherwise similarly affecting or
relating to, the Land (collectively "Leases" and individually "Lease") to the
extent Purchaser elects to take assignment thereof;
(3) Permit Number 232 644-1201 issued by the South Carolina
Department of Health and Environmental Control to Brown and Eastman for the
operation of a Construction and Demolition landfill on the Land ("Permit") and
any and all other permits, licenses, and agreements necessary to operate the
landfill on the Land; and
(4) Any and all (i) contracts or agreements, including
disposal agreements, equipment agreements, utility capacity, sewer treatment or
drainage reservations or commitments or reimbursement rights, (the "Property
Agreements"), (ii) warranties, guarantees, indemnities and claims, (iii)
licenses, permits, or similar documents relating to the Land or to Sellers' use
of the Land, to the extent Purchaser elects to take assignment thereof, (iv)
plans, drawings, specifications, surveys, engineering reports, and other
technical descriptions, (v) the property identified on the attached Schedule 1,
which shall set forth the information identified in Section 3 (a)(4) herein; and
(vi) the good will, customer lists, agreements, and other intangible assets
related to the operation of a landfill on the Land.
The above listed items are herein collectively called the "Property". All of the
Property shall be conveyed, assigned, and transferred to Purchaser at Closing
(hereinafter defined) free and clear
- --------------------------------------------------------------------------------
Purchase & Sale Agreement
Page 1 of 11
<PAGE> 2
of all liens, claims, easements and encumbrances whatsoever except for those
matters specifically approved of in writing by Purchaser, as herein provided.
(b) The price ("Purchase Price") for which Sellers agree to sell and
convey the Property to Purchaser, and which Purchaser agrees to pay to Sellers,
subject to the terms hereof, is the amount of Four Million Five Hundred Thousand
and No/100 Dollars ($4,500,000.00), to be paid in cash as provided in Section 6
hereof and allocated between the Sellers as instructed by the Sellers.
Section 2. Earnest Money. Within two (2) business days after the
receipt of the schedules (as set forth more fully in Section 19 hereof),
Purchaser shall deliver to Title Company the amount of $250,000.00 as "Earnest
Money". Title Company shall immediately deposit same in an interest-bearing
account and maintain the Earnest Money in such an account until the Earnest
Money, with interest earned thereon, is delivered pursuant to the provisions
hereof. Deposit by Purchaser of the Earnest Money is itself agreed to be
sufficient consideration to support this Agreement notwithstanding Purchaser's
rights under Section 4 hereof.
Section 3. Title Commitment, Survey and Property Schedule.
(a) Within fourteen (14) days after the date of this Agreement,
Sellers, at their sole cost and expense, shall deliver or cause to be delivered
to Purchaser the following:
(1) Commitment for Title Insurance ("Title Commitment") from
R & V Title Agency, 301 N. Main St., 24th Floor (P.O. Box 10084), Greenville,
South Carolina Attention: David E. Hodge, Esq. ("Title Company"), setting forth
the status of the title of the Land and Improvements and showing all liens,
claims, encumbrances, easements, rights-of-way, encroachments, reservations,
restrictions, and any other matters affecting the Land or Improvements; and
(2) A true, complete and legible copy of all documents
referred to in the Title Commitment, including but not limited to deeds, lien
instruments, plats, reservations, restrictions, and easements.
(3) A survey ('Survey") prepared by a licensed surveyor
acceptable to Purchaser and the Title Company, which Survey shall (i) reflect
the actual dimensions of, and area within, the Land, the location of any
easements, setback lines, encroachments, or overlaps thereon or thereover, and
the outside boundary lines of all Improvements, (ii) identify by recording
reference all easements, set-back lines, and other matters referred to on the
Title Commitment, (iii) include the surveyor's registered number and seal, the
date of the Survey, and a certificate satisfactory to Purchaser, (iv) reflect
that there is access to and from the Land from a publicly dedicated street or
road, (v) be sufficient to cause the Title Company to delete (except for
"shortages in area") the printed exception for "discrepancies, conflicts or
shortages in area or boundary lines, or encroachments, or any overlapping of
improvements" in any Owner's Title Policy obtained by Purchaser, (vi) reflect
any area within the Land that has been designated by the Federal Insurance
Administration, the Army Corps of Engineers, or any other governmental agency or
body as being subject to special or increased flooding hazards. For purposes of
the property description to be included in the general warranty deed to be
delivered pursuant to
- --------------------------------------------------------------------------------
Purchase & Sale Agreement
Page 2 of 11
<PAGE> 3
Section 6 hereof, the field notes prepared by the surveyor shall control any
conflicts or inconsistencies with Exhibit "A" hereto, and such field notes shall
be incorporated herein by this reference upon their completion and approval by
Purchaser.
(4) A list of all agreements, equipment and other Property
used in the operation of a landfill on the Land, together with a schedule of all
liens and encumbrances on all such Property.
(b) Purchaser shall have fourteen (14) days from the receipt of the
last to be delivered of the information referred to in Section 3(a) hereof to
examine same and to specify to Sellers those items that Purchaser will accept
title to the Property subject to (the "Permitted Encumbrances"), and those
matters that Purchaser finds objectionable (the "Encumbrances"). If such notice
is not timely delivered then all of the items reflected on the Schedule and
Title Commitment and any overlaps, encroachments, easements, or encumbrances
shown on the Survey shall be considered to be Permitted Encumbrances. Sellers at
their sole cost and expense shall use all reasonable efforts to cure or remove
all Encumbrances, give Purchaser written notice thereof, and deliver by Closing
pursuant to this Paragraph an amended Survey and Title Commitment reflecting the
cure of such matters.
(c) If Sellers fail to cause all of the Encumbrances to be removed or
cured timely and timely written notice thereof to be given to Purchaser,
Purchaser shall have the following rights:
(1) Purchaser may terminate this Agreement by giving Sellers
written notice thereof, in which event the Earnest Money shall be returned to
Purchaser, and neither party shall have any further rights, duties, or
obligations hereunder; or
(2) Purchaser may elect to purchase the Property subject to
the Encumbrances not so removed or cured, in which event the Purchase Price
shall be reduced by any amount paid to release any liens, abstracts of judgment
or other encumbrances of a determinable sum. For all other Encumbrances, the
Purchase Price shall be reduced by an aggregate sum of $25,000.00.
Section 4. Furnishing of Information, Conditions to Closing.
(a) The parties recognize and agree that Purchaser will require access
to, and an opportunity to evaluate the Property in order to effect the
conveyance herein contemplated. Accordingly, Sellers agree to furnish the
material and information described in this Section 4 to Purchaser as soon as is
practicable after the date hereof, and to allow Purchaser and Purchaser's agents
complete access to the Property hours from and after the date hereof.
Sellers agree to furnish to Purchaser the following information
pursuant to this Section 4(a):
(1) (i) True, complete, and legible copies of each Property
Agreement; (ii) true, complete and legible copies of any and all warranties,
guaranties, indemnities and claims relating to the Property; (iii) true,
complete and legible copies of the Permit and any and all other licenses,
permits, or similar documents necessary or appropriate to the ownership, or
development of the Property; and
- --------------------------------------------------------------------------------
Purchase & Sale Agreement
Page 3 of 11
<PAGE> 4
(2) Such surveys, engineering, environmental drainage, or
similar reports Sellers may possess relating thereto.
(b) Purchaser's obligations hereunder are also subject to the
following:
(1) Permit Number 232 644-1201 issued by the South Carolina
Department of Health and Environmental Control to Brown and Eastman for the
operation of a Construction and Demolition landfill on the Land ("Permit") and
any other permit necessary to operate the landfill on the Land being transferred
to the Purchaser; and
(2) Purchaser's satisfaction, in its sole discretion, of the
results of its environmental and regulatory due diligence review of the
Property.
If the requirements of Section 4(b)(1) are not satisfied prior to August 31,
1999, Purchaser shall be entitled to either (x) terminate this Agreement,
whereupon the Earnest Money will be returned to Purchaser and the parties will
be released from all obligations hereunder, or (y) extend the Closing until
September 30, 1999. If the requirements of Section 4(b)(1) are not satisfied by
September 30, 1999, Purchaser may either (xx) terminate this Agreement,
whereupon the Earnest Money will be returned to Purchaser and the parties will
be released from all obligations hereunder; or (yy) enforce specific performance
as set forth in Section 8(c) hereof. Notwithstanding the foregoing, Purchaser
shall not be entitled to a return of the Earnest Money if the Permit is not
transferred due to any action or inaction on the part of Purchaser.
If the requirements of Section 4(b)(2) are not satisfied by July 15, 1999,
Purchaser shall be entitled to either waive such requirements and proceed with
the Closing or to terminate this Agreement, whereupon the Earnest Money (except
a non-refundable sum of $25,000.00) will be returned to Purchaser and the
parties will be released from all obligations hereunder. If Purchaser terminates
this Agreement pursuant to a right contained in Section 4(b)(2) after July 15,
1999, the entire amount of Earnest Money shall be paid to the Sellers as
liquidated damages, the parties shall have no further obligations to the other,
and neither party shall have further rights as against the other.
Purchaser and Seller each covenant to use their reasonable best efforts to
secure the transfer of the Permit and any and all other permits, licenses, and
agreements necessary to operate the landfill on the Land.
Section 5. Sellers' Representations, Warranties, and Covenants. Sellers
hereby represent and warrant (which representations and warranties shall be
deemed also made by Sellers as of Closing) to, and covenant with, Purchaser the
following:
(a) Seller Eastman Brown/Holding Co., L.L.C. now has and will have on
the Closing Date good and indefeasible title in fee simple to the Property free
and clear of all liens (except those liens accepted by Purchaser or that will be
released at or prior to Closing) and no party, except as herein set forth, has
or shall have on the Closing Date any rights in, or to acquire, the Property.
- --------------------------------------------------------------------------------
Purchase & Sale Agreement
Page 4 of 11
<PAGE> 5
(b) There are no actions, suits, claims, assessments, or proceedings
pending or, to the knowledge of Sellers, threatened that could materially
adversely affect the ownership, operation, or maintenance of the Property or
Sellers' ability to perform hereunder.
(c) Sellers shall immediately notify Purchaser of any material change
in respect of the Property or any information heretofore of hereafter furnished
to Purchaser in respect of the Property.
(d) From the date hereof until the Closing Date, Sellers shall (i)
continue all Leases, Property Agreements, permits, licenses and contracts
relative to the Property in full force and effect and neither cancel (unless
directed to do so by Purchaser), amend, nor renew any of the same without
Purchaser's prior written consent; and (ii) afford Purchaser and its
representatives the continuing right to inspect the Property. From the date
hereof until the Closing Date, Sellers shall not: (i) commit or permit to be
committed any waste to the Property or (ii) enter into any agreement or
instrument or take any action that would encumber the Property after Closing or
that would bind Purchaser or the Property after Closing.
(e) All bills and other payments due with respect to the ownership of
the Property have been (and on the Closing Date will be) paid and no liens or
other claims for the same have been filed or asserted against any part of the
Property.
(f) Sellers have full right, power, and authority to execute, deliver,
and perform this Agreement without obtaining any further consents or approvals
from, or the taking of any other actions with respect to, any third parties and
this Agreement, when executed and delivered by Sellers and Purchaser, will
constitute the valid and binding agreement of Sellers, enforceable against
Sellers in accordance with its terms.
(g) The Land is property zoned for its current use and is not in
violation of any applicable law, statute, ordinance, rule, regulation, order or
determination of any governmental authority or any restrictive covenant or deed
restriction (recorded or otherwise) affecting any of the Property, including
without limitation all applicable zoning ordinances and land use planning or
development codes (hereinafter sometimes collectively called "Applicable Laws").
(h) Without limitation of (g) above, to Sellers' knowledge the Land and
Sellers are not currently in violation of or subject to any existing, pending or
threatened investigation or inquiry by any governmental authority or to any
remedial obligations under any Applicable Laws pertaining to health or the
environment (hereinafter sometimes collectively called "Applicable Environmental
Laws"), including without limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 ("CERCLA"), the Resource Conservation
and Recovery Act of 1976 ("RCRA"), and this representation and warranty would
continue to be true and correct following disclosure to the applicable
governmental authorities of all relevant facts, conditions and circumstances, if
any, pertaining to the Land.
(i) Sellers have not obtained and are not required to obtain, and
Sellers have no knowledge of any reason Purchaser will be required to obtain,
any permits, licenses or similar authorizations to develop the Land by reason of
any Applicable Environmental Laws, save and except the Permit and all other
permits, licenses and approvals being transferred to Purchaser.
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Purchase & Sale Agreement
Page 5 of 11
<PAGE> 6
(j) Except as set forth on Schedule 5(j), no hazardous substances or
solid wastes have been disposed of or otherwise released on or to the Land. In
this Agreement the terms "hazardous substance" and "release" shall have the
meanings specified in CERCLA, and the terms "solid waste" and "disposal" (or
"disposed") shall have the meanings specified in RCRA; provided, to the extent
that the laws of the State of South Carolina establish a meaning for "hazardous
substance", "release", "solid waste", or "disposal" which is broader than that
specified in either CERCLA or RCRA, such broader meaning shall apply. There are
no PCBs in or on the Land and the Land contains no underground storage tanks.
Section 6. Closing.
(a) The closing ("Closing") of the sale of the Property by Sellers to
Purchaser shall occur on or before August 31, 1999. The Closing shall occur in
the offices of the Title Company or at such other location as the parties
mutually agree. In the event the Permit is not transferred on or prior to August
31, 1999, the Closing may be extended by Purchaser as set forth in Section 4(b).
(b) At the Closing, the following (which are mutually concurrent
conditions) shall occur:
(1) Purchaser, at its sole cost and expense, shall deliver or
cause to be delivered to Sellers the following:
(i) A cashier's check, or the check of the Title
Company, made payable to the order of Sellers, or immediately available cash
funds, in the amount of the cash portion of the Purchase Price as set out in
Section 1(b)(1) hereof, adjusted as provided for in Sections 6(c) and 6(d)
hereof,
(ii) Evidence satisfactory to Sellers and the Title
Company that the person executing the Closing documents on behalf of Purchaser
has full right, power, and authority to do so.
(2) Sellers, at their sole cost and expense, shall deliver or
cause to be delivered to Purchaser the following:
(i) General Warranty Deed in form and substance
satisfactory to Purchaser, fully executed and acknowledged by the appropriate
Seller or Sellers, conveying to Purchaser the Land, subject only to the
Permitted Encumbrances;
(ii) Assignment in form and substance satisfactory
to Purchaser, fully executed and acknowledged by the appropriate Seller or
Sellers, assigning, conveying and transferring, to the extent Purchaser elects
to take assignment thereof, all of the Property except the Land to Purchaser,
subject only to the Permitted Encumbrances;
(iii) Completed Transfer to Purchaser, with all
required State of South Carolina approvals obtained, of the Permit and any other
permit necessary to operate the landfill on the Land;
- --------------------------------------------------------------------------------
Purchase & Sale Agreement
Page 6 of 11
<PAGE> 7
(iv) Evidence satisfactory to Purchaser and the
Title Company that the person or persons executing the Closing documents on
behalf of Sellers have full right, power and authority to do so;
(v) Certificate meeting the requirements of Section
1445 of the Internal Revenue Code of 1954 executed and sworn to by Sellers; and
(vi) Such other instruments as are customarily
executed in South Carolina to effectuate the conveyance of property similar to
the Property, with the effect that after the Closing, Purchaser will have
succeeded to all of the rights, titles, and interests of Sellers related to the
Property and Sellers will no longer have any rights, titles, or interests in and
to the Property.
(c) The Purchase Price shall be inclusive of the Earnest Money. All
normal and customarily proratable items, including without limitation real
estate taxes, all income of the Property, and the Property Agreement payments
shall be prorated as of the Closing Date, Sellers being charged and credited for
all of same on and after such date. Purchaser shall be responsible for (and
receive the benefit of) any such items attributable to the period after Closing
except for any payments under Property Agreements Purchaser does not assume or
any other obligations Purchaser does not assume. If the actual amounts to be
prorated are not known as of the Closing Date, the prorations shall be made on
the basis of the best evidence then available, and thereafter, when actual
figures are received, a cash settlement will be made between Sellers and
Purchaser. Sellers shall be responsible for payment of all transfer taxes (f/k/a
"deed stamps"). Each party shall be responsible for its own attorneys' fees and
costs. The provisions of this Section 6(d) shall survive the Closing.
(d) Of the Purchase Price set out in Section l(b)(1) hereof, the sum of
FIVE HUNDRED THOUSAND AND N01100 DOLLARS ($500,000.00) shall not be paid to
Sellers unless and until the issuance by the South Carolina Department of
Environmental Control of a permit for Phase II of the Shiloh Site on the Land
(with a minimum expansion capacity of 740,000 cubic yards within such Phase II)
(the "Permit Expansion"). Within ten (10) days of the issuance of the permit
described in this Section 6(d), Purchaser shall deliver the funds set forth
herein to the Sellers. This provision is binding upon Waste Corporation of
America, Inc. and any and all assigns thereof and shall run with the land.
Purchaser and Sellers shall use their reasonable best efforts to obtain the
Permit Expansion; provided, however, that Purchaser shall pay all reasonable
costs and expenses associated therewith.
(e) Upon completion of the Closing, Sellers shall deliver to Purchaser
possession of the Property free and clear of all tenancies of every kind or any
parties in possession, and in the same condition as on the date hereof, normal
wear only excepted.
Section 7. Destruction, Damage, or Taking Prior to Closing. Prior to
Closing, risk of loss with regard to the Property shall be borne by Sellers. If,
prior to Closing, the Property becomes subject to a taking by virtue of eminent
domain, to any extent whatsoever, Purchaser shall have the option, which must be
exercised by it by the Closing Date, to terminate this Agreement or to proceed
with the Closing. If Purchaser elects to terminate this Agreement, all rights,
duties, obligations and liabilities created hereunder shall cease. If Purchaser
elects to
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<PAGE> 8
proceed with the Closing, it shall be obligated to do so (subject to the other
provisions hereof) but Purchaser shall be entitled to any award as a result of
such damage or taking and, to the extent the same may be necessary or
appropriate, Sellers shall assign to Purchaser at Closing Sellers' rights to
such award.
Section 8. Remedies.
(a) If Purchaser refuses to consummate the purchase of the Property
pursuant to this Agreement for any reason other than termination hereof pursuant
to a right granted to Purchaser to do so, or breach by any Seller of his or its
representations, warranties, or agreements hereunder, then Sellers, as their
sole remedy, shall have the right to terminate this Agreement by giving
Purchaser written notice thereof, in which event neither party hereto shall have
any further rights, duties, or obligations hereunder and Title Company shall
deliver to Sellers, as liquidated damages (Sellers and Purchaser hereby
acknowledging that the amount of damages resulting from a breach of this
Agreement by Purchaser would be difficult or impossible to accurately
ascertain), the Earnest Money.
(b) If Purchaser terminates this Agreement pursuant to a right granted
to Purchaser hereunder to do so, then neither party hereto shall have any
further rights, duties, or obligations hereunder, and Title Company shall return
to Purchaser the Earnest Money, free of any claims by Sellers with respect
thereto.
(c) Subject to the limitations contained in Section 5(a) herein, if any
Seller fails or is unable to perform any of his or its obligations or agreements
hereunder either prior to or at Closing, or if any of any Seller's
representations or warranties made hereunder, or any of the information
furnished by any Seller pursuant hereto, should be false or misleading in any
material respect, Purchaser may terminate this Agreement by notifying Sellers
thereof in which event the Title Company shall return to Purchaser the Earnest
Money; enforce specific performance of the obligations of Sellers hereunder; and
seek any other rights, recourses, or remedies available to Purchaser whether
hereunder, at law, or in equity. Purchaser's rights, remedies, and recourses
shall be cumulative.
Section 9. Indemnity. Sellers agree to indemnify and hold Purchaser
harmless from and against and to reimburse Purchaser with respect to, any and
all claims, demands, causes of action, loss, damage, liabilities, costs and
expenses (including attorney's fees and court costs) of any and every kind or
character, known or unknown, fixed or contingent, asserted against or incurred
by Purchaser at any time and from time to time by reason of or arising out of
either (a) the breach of any representation or warranty of any Seller set forth
herein, or (b) the failure of any Seller to perform any obligation herein
required to be performed by that Seller. Purchaser agrees to indemnify and hold
Sellers harmless from and against and to reimburse Sellers with respect to, any
and all claims, demands, causes of action, loss, damage, liabilities, costs and
expenses (including attorney's fees and court costs) of any and every kind or
character, known or unknown, fixed or contingent, asserted against or incurred
by any Seller at any time and from time to time by reason of or arising out of
either (a) the breach of any representation or warranty of Purchaser set forth
herein, of (b) the failure of Purchaser to perform any obligation herein
required to be performed by Purchaser.
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<PAGE> 9
Section 10. Commissions. Purchaser shall owe a commission or finder's
fee of _________________ to Richard Sieburg with regard to the sale of the
Property. Sellers hereby agree to defend, indemnify, and hold harmless
Purchaser, and Purchaser hereby agrees to defend, indemnify, and hold harmless
Sellers, from and against any other claim by third parties to this Agreement or
the sale of the Property, and any court costs, attorneys' fees or other costs or
expenses arising therefrom, and alleged to be due by authorization of the
indemnifying party.
Section 11. Notices. Any notice provided or permitted to be given under
this Agreement must be in writing and may be given by depositing same in the
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, by delivering the same in
person to such party; or by prepaid telegram or telex. Notice given in
accordance herewith shall be effective when it is given. For purposes of notice,
the addresses of the parties shall be as follows:
If to Sellers, to: Jim Brown
David Eastman
Eastman Brown/Holding Co., L.L.C.
223 Rock Quarry Road
Travelers Rest, South Carolina 29690
With a copy to: David E. Hodge, Esq.
301 North Main Street, 24th Floor
P. O. Box 10084
Greenville, South Carolina 29603
If to Purchaser: Waste Corporation of America, Inc.
One Riverway, Suite 1400
Houston, Texas 77056
ATTN: Ed Menger
With a copy to: Keith Short, Esq.
Short & Ketchand, L.L.P.
11 Greenway Plaza, Suite 1520
Houston, Texas 77046
Either party hereto may change its address for notice by giving ten (10) days
prior written notice thereof to the other party.
Section 12. Survival; Effect of Inspections. Any claim or cause of
action arising out of the falsity or untruth of any of Sellers' representations
and warranties herein made, or made pursuant hereto, shall survive the Closing;
any inspections or examinations of the Property or information relative thereto
by Purchaser shall not diminish or otherwise affect Sellers' representations and
warranties relative thereto, and Purchaser shall continue to rely thereon.
Section 13. Entire Agreement. This Agreement is the entire agreement
between Sellers and Purchaser concerning the sale of the Property and no
modification hereof or
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<PAGE> 10
subsequent agreement relative to the subject matter hereof shall be binding on
either party unless reduced to writing and signed by the party to be bound.
Section 14. Exhibits and Schedules. Exhibit "A" and all Schedules
attached hereto are incorporated herein by this reference for all purposes.
Section 15. Gender and Number. As used herein, unless the context
prohibits, pronouns of any gender shall include all genders and all numbers
shall include the singular and the plural.
Section 16. Captions. The Section captions are inserted for convenience
of reference only and shall in no way alter, modify, or define, or be used in
construing, the text of such sections.
Section 17. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of South Carolina.
Section 18. Assigns. This Agreement may be assigned by Purchaser and
shall inure to the benefit of and be binding on the parties hereto and their
respective heirs, legal representatives, successors, and assigns.
Notwithstanding the foregoing, Waste Corporation of America, Inc. shall remain
liable for all obligations of Purchaser through Closing. No Seller may assign
this Agreement to any other person or entity, save and except that the Permit
may be transferred by and among the Sellers immediately prior to Closing in
order to effectuate the Closing.
Section 19. Miscellaneous. Schedule 1 shall be attached hereto within 2
business days of the execution of this Agreement which schedule shall at that
time include the list of equipment and debt thereon. Within seven (7) days of
the date of execution of this Agreement, Schedule 1 shall be updated to include
all information required by Section 3(a)(4). Schedule 5(j) shall be attached
hereto within 2 business days of the execution of this Agreement. Purchaser
reserves the right to object to any information contained in schedules pursuant
to the terms of this Agreement.
EXECUTED as of May ___, 1999.
WASTE CORPORATION OF AMERICA, INC.
--------------------------------------------
DAVID EASTMAN
By:
------------------------------
Its:
-----------------------------
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<PAGE> 11
EASTMAN BROWN/HOLDING CO., L.L.C.
--------------------------------------------
JIM BROWN
By:
------------------------------
Its:
-----------------------------
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<PAGE> 1
EXHIBIT 10.a
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the use of our report dated February 25, 2000 included herein
and to the reference to our firm under the heading "Experts" in the prospectus
and the Registration Statement on Form SB-1.
/s/
Harper and Pearson Company, P.C.
Houston, Texas
March 16, 2000
<PAGE> 1
EXHIBIT 11
March 17, 2000
WCA Shiloh Landfill, L.L.C.
One Riverway, Suite 1400
Houston, Texas 77056
Ladies and Gentlemen:
We have acted as counsel to WCA Shiloh Landfill, L.L.C., a Delaware
limited liability company (the "Company"). We are rendering this opinion in
connection with the Company's registration under the Securities Act of 1933, as
amended, of an aggregate of $5,000,000 aggregate initial offering price of the
Company's senior secured bonds (the "Bonds") described in the registration
statement on Form SB-1 (the "Registration Statement") of the Company.
The Bonds are to be offered upon the terms and subject to the
conditions set forth in a bond purchase agreement by and between the Company and
the underwriters named therein (the "Underwriting Agreement"). The Bonds are to
be issued pursuant to an indenture between the Company and Regions Bank as
Trustee.
In connection with this opinion, we have examined the Registration
Statement covering the Bonds which is to be filed with the Securities and
Exchange Commission, originals or copies certified or otherwise identified to
our satisfaction of the organizational documents of the Company, each as amended
to date, the proceedings of the Company with respect to the offering of the
Bonds and such other documents and instruments as we have deemed necessary or
appropriate for the expression of the opinions contained herein.
We have assumed the authenticity and completeness of all records,
certificates and other instruments presented to be originals, the conformity to
original documents of all records, certificates, and other instruments submitted
to us as copies, the authenticity and completeness of the originals of those
records, certificates and other instruments submitted to us as copies and the
correctness of all statements of fact contained in all records, certificates and
other instruments that we have examined.
Based on the foregoing, and having regard for such legal considerations
as we have deemed relevant, we are of the opinion that the Bonds, when duly
authorized and duly executed by the proper officers of the Company,
authenticated and delivered by the Trustee in accordance with the Indenture, and
issued and sold pursuant to the terms of the Underwriting Agreement against
payment of the consideration therefor, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms.
The opinions expressed above regarding the enforceability of the Bonds
is subject to the exception that enforcement may be limited by bankruptcy,
insolvency, reorganization,
<PAGE> 2
WCA Shiloh Landfilee, L.L.C.
March 17, 2000
Page 2
moratorium or other laws relating to or affecting enforcement of creditors
right's generally and by general equity principles.
The opinions set forth above are limited in all respects to matters of
Texas law and to the Delaware Limited Liability Company Act (including the
applicable provisions of the Delaware Constitution and the reported judicial
decisions interpreting these laws).
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Prospectus included as part of the Registration Statement. In
giving such consent, we do not admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended.
Very truly yours,
MAYOR, DAY, CALDWELL & KEETON, L.L.P.
